Kaposi sarcoma-associated herpesvirus (KSHV) is associated with 3 different human malignancies: Kaposi sarcoma (KS), primary effusion lymphoma, and multicentric Castleman disease. The KS lesion is driven by KSHV-infected endothelial cells and is highly dependent on autocrine and paracrine factors for survival and growth. We report that latent KSHV infection increases the vascular permeability of endothelial cells. Endothelial cells with latent KSHV infection display increased Rac1 activation and activation of its downstream modulator, p21-activated kinase 1 (PAK1). The KSHV-infected cells also exhibit increases in tyrosine phosphorylation of vascular endothelial (VE)-cadherin and β-catenin, whereas total levels of these proteins remained unchanged, suggesting that latent infection disrupted endothelial cell junctions. Consistent with these findings, we found that KSHV-infected endothelial cells displayed increased permeability compared with uninfected endothelial cells. Knockdown of Rac1 and inhibition of reactive oxygen species (ROS) resulted in decreased permeability in the KSHV-infected endothelial cells. We further demonstrate that the KSHV K1 protein can activate Rac1. Rac1 was also highly activated in KSHV-infected endothelial cells and KS tumors. In conclusion, KSHV latent infection increases Rac1 and PAK1 activity in endothelial cells, resulting in the phosphorylation of VE-cadherin and β-catenin and leading to the disassembly of cell junctions and to increased vascular permeability of the infected endothelial cells.