The cascade of herpes simplex virus (HSV) gene expression that results in viral replication begins with the activation of viral immediate-early (IE) genes by the virion-associated protein VP16. VP16 on its own is inefficient at associating with complexes formed on IE gene promoters and depends upon the cellular factor HCF for its activity. In this respect VP16 mimics the host basic leucine zipper (bZIP) protein Luman, which also requires HCF for activating transcription. Our objective is to explore interactions between Luman and HCF and to determine if they play a role in the biology of herpesviruses. In this report we show that in cultured cells ectopically expressed Luman was retained in the cytoplasm, where it colocalized with Calnexin, a protein normally associated with the endoplasmic reticulum (ER). Retention of Luman in the ER depends on a hydrophobic segment of the protein that probably serves as a transmembrane domain. Deletion of this domain changed the intracellular location of Luman so that most of the mutant protein was in the nucleus of cells. While HCF was present in the nucleus of most cells, in cells expressing Luman it was retained in the cytoplasm where the two proteins colocalized. This cytoplasmic association of Luman and HCF could also be demonstrated in neurons in trigeminal ganglia removed from cattle soon after death. Cells in tissue culture that expressed Luman, but not a mutant form of the protein that fails to bind HCF, were resistant to a productive infection with HSV type 1 (HSV-1). We hypothesize that similar Luman-HCF interactions in sensory neurons in trigeminal ganglia result in the suppression of viral replication and the establishment of latency. Interestingly, Luman could activate the promoters of IE110 and LAT, two genes that are critical for reactivation of HSV-1 from latency. This suggests a role for Luman in the reactivation process as well.