Human herpesvirus 8 (HHV-8; Kaposi's sarcoma herpesvirus) encodes four open reading frames with homology to cellular proteins of interferon regulatory factor (IRF) family. Three of them, viral IRF-1 (vIRF-1), vIRF-2, and vIRF-3, have been cloned and found, when overexpressed, to down-regulate the transcriptional activity of interferon type I gene promoters in infected cells by interfering with the transactivating activity of cellular IRFs. In this study, we have further characterized vIRF-2 and shown that it is a nuclear protein which is constitutively expressed in HHV-8-positive pleural effusion lymphoma cell lines. Nuclear localization of vIRF-2 was confirmed by in situ detection of ectopically expressed enhanced green fluorescent protein/vIRF-2 fusion protein. We found that the expression of vIRF-2 in HEK293 cells inhibited the antiviral effect of interferon and rescued translation of vesicular stomatitis virus mRNA from interferon-induced translational block. To provide insight into the mechanism of this effect we have demonstrated that vIRF-2 physically interacts with PKR consequently inhibiting autophosphorylation of double-stranded RNA-activated protein kinase (PKR) and blocking phosphorylation of PKR substrates histone 2A and eukaryotic translation initiation factor 2alpha. These results suggest that the latently expressed vIRF-2 has a role in viral mimicry which targets the activity of interferon-induced PKR kinase. By inhibiting the kinase activity of PKR and consequent down-modulation of protein synthesis, HHV-8 has evolved a mechanism by which it can overcome the interferon-mediated antiviral effect. Thus, the anti-interferon functions of vIRF-2 may contribute to the establishment of a chronic or latent infection.