The expression of the Epstein-Barr virus LMP1 oncogene is regulated by viral and non-viral factors in a tissue dependent fashion. The virus encoded transcription factor EBNA2 induces its expression in human B-cells. However, this induction also requires the contribution of cellular and/or other viral factors. In nasopharyngeal carcinoma cells and in cells from Hodgkin's lymphoma, LMP1 gene transcription is independent of viral products. Here we show that the effect of a factor binding to a cAMP responsive-like element (CRE) in the LMP1 gene transcription regulatory sequence (LRS) is essential for efficient promoter activity in the DG75 B-cell line and that elevation of cAMP levels in the cells induces LRS-derived CAT activity in a CRE dependent fashion. Incubation of two EBV-immortalized B-cell lines expressing endogenous EBNA2A with 8-Br cAMP increased the levels of the latency associated 66 kDa LMP1 within 2 h. Interestingly, LMP1 expression in DG75 cells conferred resistance to the inhibitory effect of 8-Br cAMP on cell proliferation. The protein phosphatase 1 and 2A (PP1 and PP2A, respectively) inhibitor okadaic acid also stimulated LRS-CAT activity in DG75 cells. EBNA2A from an EBV-immortalized B-cell line co-immunopurified with a PP1-like protein. An EBNA2A fragment spanning residues 324-436 fused to the GST protein specifically rescued a PP1/PP2A-like component from DG75 cell extracts. This GST-EBNA2A fusion product inhibited a PP1-like activity in nuclear extracts from these cells.