Primary effusion lymphoma (PEL) is a distinct type of B-cell non-Hodgkin lymphoma characterized by the presence of Kaposi's sarcoma-associated herpesvirus (KSHV/human herpesvirus 8). Despite having a genotype and gene expression signature of highly differentiated B cells, PEL does not usually express surface or cytoplasmic immunoglobulin (Ig). We show the lack of Oct-2 and OCA-B transcription factors to be responsible, at least in part, for this defect in Ig production. Like Ig genes, ORF50, the key regulator of the switch from latency to lytic reactivation, contains an octamer motif within its promoter. We therefore examined the impact of Oct-2 and OCA-B on ORF50 activation. The binding of Oct-1 to the ORF50 promoter has been shown to significantly enhance ORF50 transactivation. We found that Oct-2, on the other hand, inhibited ORF50 expression and consequently lytic reactivation by competing with Oct-1 for the octamer motif in the ORF50 promoter. Our data suggest that Oct-2 downregulation in infected cells would be favorable to KSHV in allowing for efficient viral reactivation.