Kaposi's sarcoma (KS) is a neoplasm that develops as multifocal lesions characterized by a histological picture that includes irregularly shaped vascular spaces surrounded by perivascular and interstitial spindle-shaped cells, extravasated erythrocytes, and an inflammatory mononuclear cell infiltrate. Recently, the DNA sequences of a novel human gamma-herpesvirus-like (HHV-8) agent have been detected by polymerase chain reaction in KS associated with acquired immune deficiency syndrome (AIDS-KS), classical KS, and African endemic KS. The present study was done to identify the specific cells within KS tumors that contain the viral DNA. Fourteen skin biopsy specimens, including three classical KSs, six AIDS-KSs, three normal skin specimens, and two common warts from healthy individuals, were examined by polymerase chain reaction for the presence of the HHV-8 DNA sequences. HHV-8 DNA were present in all nine KS specimens but not detectable in the five non-KS tissue samples. Using in situ hybridization, we found the HHV-8 DNA sequences to be predominantly localized to the nuclei of endothelial cells lining the vascular slits and some perivascular spindle-shaped cells, in two of three KS and four of six AIDS-KS tissue sections examined. The HHV-8-positive cells of KS specimens were concurrently shown to also be positive for factor-VIII-related antigen by immunohistochemical staining. The presence of the DNA of HHV-8 in the nuclei of KS cells further supports the possibility that this agent may play a role in the pathogenesis of this tumor.