The latency-associated nuclear antigen (LANA) of Kaposi's sarcoma-associated herpesvirus (KSHV) is expressed in all KSHV-associated malignancies. LANA is essential for replication and maintenance of the viral episomes during latent infection. However, LANA also has a transcriptional regulatory role and can affect gene expression both positively and negatively. A previously performed yeast two-hybrid screen identified glycogen synthase kinase 3 (GSK-3) as a LANA-interacting protein. Interaction with both GSK-3alpha and GSK-3beta was confirmed in transfected cells with coprecipitation assays. GSK-3beta also interacted with the herpesvirus saimiri homolog ORF73. GSK-3beta is an intermediate in the Wnt signaling pathway and a negative regulator of beta-catenin. In transfected cells, LANA was shown to overcome GSK-3beta-mediated degradation of beta-catenin. Examination of primary effusion lymphoma (PEL) cells found increased levels of beta-catenin relative to KSHV-negative B cells, and this translated into increased activity of a beta-catenin-responsive reporter containing Tcf/Lef binding sites. In tetradecanoyl phorbol acetate-treated PEL cells, loss of LANA expression correlated temporally with loss of detectable beta-catenin. LANA was found to alter the intracellular distribution of GSK-3beta so that nuclear GSK-3beta was more readily detectable in the presence of LANA. Mapping experiments with coimmunoprecipitation assays revealed that both N-terminal and C-terminal LANA sequences were required for efficient GSK-3beta interaction. LANA mutants that were defective for GSK-3beta interaction were unable to mediate GSK-3beta relocalization or activate a beta-catenin-responsive Tcf-luciferase reporter. This study identified manipulation of GSK-3beta activity as a mechanism by which LANA may modify transcriptional activity and contribute to the phenotype of primary effusion lymphoma.