The latency-associated nuclear antigen 1 (LANA-1) of Kaposi's sarcoma-associated herpesvirus (KSHV) is required for the maintenance and replication of viral episomal DNA. The binding sites for nuclear heterochromatin and transcriptional repressor complexes are located in an amino-terminal region of LANA-1, whereas those for viral episomal DNA, p53, pRB, and members of the BRD/fsh family of nuclear proteins are located in its carboxy-terminal domain. LANA-1 activates or represses several cellular and viral promoters. In this report we show that a domain of 15 amino acids (amino acids 1129 to 1143), located close to the carboxy-terminal end of LANA-1, is required for the interaction of LANA-1 with nuclear heterochromatin or nuclear matrix, and for the ability of LANA-1 to activate the Epstein-Barr virus Cp promoter. LANA-1 proteins that are tightly associated with nuclear heterochromatin or matrix differ in molecular weight from LANA-1 proteins that can be dissociated from the nuclear matrix by high-salt buffers, suggesting that posttranslational modifications may determine the association of LANA-1 with nuclear heterochromatin or matrix.