Kaposi's sarcoma-associated herpesvirus (KSHV), or human herpesvirus 8, is invariably present in Kaposi's sarcoma lesions. KSHV contains several viral oncogenes and serological evidence suggests that KSHV infection is necessary for the development of Kaposi's sarcoma, but cellular transformation by this virus has not so far been demonstrated. KSHV is found in the microvascular endothelial cells in Kaposi's sarcoma lesions and in the spindle 'tumour' cells, which are also thought to be of endothelial origin. Here we investigate the biological consequences of infecting human primary endothelial cells with purified KSHV particles. We find that infection causes long-term proliferation and survival of these cells, which are associated with the acquisition of telomerase activity and anchorage-independent growth. KSHV was present in only a subset of cells, and paracrine mechanisms were found to be responsible for the survival of uninfected cells. Their survival may have been mediated by upregulation of a receptor for vascular endothelial growth factor. Our results indicate that transformation of endothelial cells by KSHV, as well as paracrine mechanisms that are induced by this virus, may be critical in the pathogenesis of Kaposi's sarcoma.