Kaposi sarcoma-associated herpesvirus (KSHV) infection is essential to the development of Kaposi sarcoma (KS). Notch signaling is also known to play a pivotal role in KS cell survival and lytic phase entrance of KSHV. In the current study, we sought to determine whether KSHV regulates Notch components. KSHV-infected lymphatic endothelial cells showed induction of receptors Notch3 and Notch4, Notch ligands Dll4 and Jagged1, and activated Notch receptors in contrast to uninfected lymphatic endothelial cells. In addition, KSHV induced the expression of endothelial precursor cell marker (CD133) and mural cell markers (calponin, desmin, and smooth muscle alpha actin), suggesting dedifferentiation and trans-differentiation. Overexpression of latency proteins (LANA, vFLIP) and lytic phase proteins (RTA, vGPCR, viral interleukin-6) further supported the direct regulatory capacity of KSHV viral proteins to induce Notch receptors (Notch2, Notch3), ligands (Dll1, Dll4, Jagged1), downstream targets (Hey, Hes), and endothelial precursor CD133. Targeting Notch pathway with gamma-secretase inhibitor and a decoy protein in the form of soluble Dll4 inhibited growth of KSHV-transformed endothelial cell line. Soluble Dll4 was also highly active in vivo against KS tumor xenograft. It inhibited tumor cell growth, induced tumor cell death, and reduced vessel perfusion. Soluble Dll4 is thus a candidate for clinical investigation.