ABSTRACT Kaposi's sarcoma-associated herpesvirus (KSHV) is the pathological agent of Kaposi's sarcoma (KS), a tumor characterized by aberrant proliferation of endothelial-cell-derived spindle cells. Since in many cancers tumorigenesis is associated with an increase in the activity of the cathepsin family, we studied the role of cathepsins in KS using an in vitro model of KSHV-mediated endothelial cell transformation. Small-molecule inhibitors and small interfering RNA (siRNA) targeting CTSB, but not other cathepsins, inhibited KSHV-induced postconfluent proliferation and the formation of spindle cells and foci of dermal microvascular endothelial cells. Interestingly, neither CTSB mRNA nor CTSB protein levels were induced in endothelial cells latently infected with KSHV. Secretion of CTSB was strongly diminished upon KSHV infection. Increased targeting of CTSB to endosomes was caused by the induction by KSHV of the expression of insulin-like growth factor-II receptor (IGF-IIR), a mannose-6-phosphate receptor (M6PR) that binds to cathepsins. Inhibition of IGF-IIR/M6PR expression by siRNA released CTSB for secretion. In contrast to the increased cathepsin secretion observed in most other tumors, viral inhibition of CTSB secretion via induction of an M6PR is crucial for the transformation of endothelial cells.