Kaposi's sarcoma-associated herpesvirus (KSHV) contains many cellular homologue genes. The K9 open reading frame (ORF) of KSHV encodes a virus-encoded interferon regulatory factor (vIRF) which functions as a repressor for cellular interferon-mediated signal transduction, and as an oncogene to induce cell growth transformation. In addition, KSHV vIRF plays an important role in the regulation of gene expression. From genetic and biochemical analysis, we demonstrate that KSHV vIRF1 binds to a transcriptional coactivator CREB-binding protein (CBP) in vivo and in vitro. KSHV vIRF1 binds to the KIX domain and CH/3 region of CBP. The CH/3 region of CBP coincides with the binding region of adenovirus E1A. We also show that vIRF1 inhibits the transactivational activity of CBP in HeLa cells. These results demonstrate that vIRF1 can modulate gene expression by inhibiting the transactivation function of coactivator CBP.