LMP1 induces the phenotypic transformation of fibroblasts and affects regulators of the cell cycle during this process. LMP1 decreases expression of the cyclin-dependent kinase inhibitor p27 and increases the levels and phosphorylation of cyclin-dependent kinase 2 and the retinoblastoma protein. In the present study, the effects of LMP1 on cell cycle progression and the mechanism of p27 downregulation by LMP1 were determined. Although p27 is frequently regulated at the posttranscriptional level during cell cycle progression and in cancer, LMP1 did not decrease ectopically expressed p27. However, LMP1 did decrease p27 RNA levels and inhibited the activity of p27 promoter reporters. The LMP1-regulated promoter element was mapped to a region containing two E2F sites. Electrophoretic mobility shift assays determined that the regulated cis element bound an inhibitory E2F complex containing E2F4 and p130. These findings indicate that LMP1 decreases p27 transcription through effects on E2F family transcription factors. This property likely contributes to the ability of LMP1 to stimulate cell cycle progression.