Epstein-Barr virus nuclear protein 2 (EBNA-2) increases mRNA levels of specific viral and cellular genes through direct or indirect effects on upstream regulatory elements. The EBNA-2 domains essential for these effects have been partially defined and correlate with domains important for B-cell growth transformation. To determine whether EBNA-2 has a direct transcriptional activating domain, gene fusions between the DNA-binding domain of GAL4 and EBNA-2 were tested in CHO and B-lymphoma cells for the ability to activate transcription from target plasmids containing GAL4 recognition sites upstream of an adenovirus or murine mammary tumor virus promoter. In B-lymphoma cells, a 37-amino-acid EBNA-2 domain previously identified to be essential for transformation was nearly as strong a transcriptional activator as the activating domain of herpes simplex virus trans-inducing factor VP16. A quadradecapeptide had about 25% of the activating activity of the longer peptide. This first evidence that EBNA-2 directly activates transcription should facilitate the identification of nuclear factors with which EBNA-2 interacts in transactivation and transformation.