Epstein-Barr virus (EBV) requires six genes to efficiently immortalize human B cells. We have shown that one of these, EBNA3C, can cooperate with activated (Ha-)ras in co-transfection assays to immortalize and transform rat embryo fibroblasts (REFs). EBNA3C also augmented transformation by (Ha-)ras and a mutant p53 to a similar extent as human papilloma virus E7. As with E7 this effect was not inhibited by cotransfection with the cyclin-dependent kinase inhibitor (CDKI), a p16INK4A, which can normally activate the retinoblastoma protein (pRb) and induce growth arrest. Also like E7/ras and E1A/ras transformed cells the EBNA3C/ras transformants are very susceptible to apoptotic cell death. In vitro EBNA3C binds to pRb in a manner which is dependent on the integrity of the pocket domain; this suggests that EBNA3C, even though it lacks the LXCXE pRb binding motif found in E7 and E1A, may interact with pRb in vivo. We conclude that EBNA3C functions as an oncoprotein which directs cell cycle progression through the G1 phase restriction point when conditions might signal arrest. For the first time this demonstrates that EBV encodes a protein, functionally but not necessarily mechanistically, similar to the pRb-neutralizing nuclear antigens encoded by the 'small' DNA tumor viruses.