The nucleolus is a subnuclear compartment whose primary function is the biogenesis of ribosomal subunits. Certain viral infections affect the morphology and composition of the nucleolar compartment and influence ribosomal RNA (rRNA) transcription and maturation. However, no description of nucleolar morphology and function during infection with Kaposi’s sarcoma-associated herpesvirus (KSHV) is available to date. Using immunofluorescence microscopy, we documented extensive destruction of the nuclear and nucleolar architecture during the lytic reactivation of KSHV. This was manifested by the redistribution of key nucleolar proteins, including the rRNA transcription factor UBF. Distinct delocalization patterns were evident; certain nucleolar proteins remained together whereas others dissociated, implying that nucleolar proteins undergo nonrandom programmed dispersion. Significantly, the redistribution of UBF was dependent on viral DNA replication or late viral gene expression. No significant changes in pre-rRNA levels and no accumulation of pre-rRNA intermediates were found by RT-qPCR and Northern blot analysis. Furthermore, fluorescent in situ hybridization (FISH), combined with immunofluorescence, revealed an overlap between Fibrillarin and internal transcribed spacer 1 (ITS1), which represents the primary product of the pre-rRNA, suggesting that the processing of rRNA proceeds during lytic reactivation. Finally, small changes in the levels of pseudouridylation (Ψ) and 2′-O-methylation (Nm) were documented across the rRNA; however, none were localized to the functional domain. Taken together, our results suggest that despite dramatic changes in the nucleolar organization, rRNA transcription and processing persist during lytic reactivation of KSHV. Whether the observed nucleolar alterations favor productive infection or signify cellular anti-viral responses remains to be determined.