Epstein-Barr virus (EBV) SM protein is an essential nuclear protein produced during the lytic cycle of EBV replication. SM is an RNA-binding protein with multiple mechanisms of action. SM enhances the expression of EBV genes by stabilizing mRNA and facilitating nuclear export. SM also influences splicing of both EBV and cellular pre-mRNAs. SM modulates splice site selection of the host cell STAT1 pre-mRNA, directing utilization of a novel 5 splice site that is used only in the presence of SM. SM activates splicing in the manner of SR proteins but does not contain the canonical RS domains typical of cellular splicing factors. Affinity purification and mass spectrometry of SM complexes from SM-transfected cells led to the identification of the cellular SR splicing factor SRp20 as an SM-interacting protein. The regions of SM and SRp20 required for interaction were mapped by in vitro and in vivo assays. The SRp20 interaction was shown to be important for the effects of SM on alternative splicing by the use of STAT1 splicing assays. Overexpression of SRp20 enhanced SM-mediated alternative splicing and knockdown of SRp20 inhibited the SM effect on splicing. These data suggest a model whereby SM, a viral protein, recruits and co-opts the function of cellular SRp20 in alternative splicing.SM protein (EB2, Mta, and BMLF1) is a nuclear phosphoprotein synthesized by Epstein-Barr virus (EBV) during the early stage of lytic replication (for a review, see reference 38). SM has multiple functions in enhancing EBV gene expression posttranscriptionally, binds target gene mRNA, enhances nuclear mRNA export and stability, and modulates cellular and EBV RNA splicing (2,9,17,18,23,31,35,39,40). SM is essential for EBV replication and EBV recombinants with insertional deletion of the SM gene are defective for virus production (12). SM is required for the efficient accumulation of ca. 60% of EBV lytic transcripts (13). SM is required for efficient expression of both EBV DNA primase (BSLF1) and EBV DNA polymerase (BALF5) mRNAs, leading to severely impaired lytic EBV DNA replication in the absence of SM (13). SM also directly enhances accumulation of specific late gene mRNAs in addition to enabling DNA replication (13). This combination of effects on DNA replication and late gene mRNAs leads to a global deficiency of late gene expression in the absence of SM.We recently demonstrated that SM acts as an alternative splicing factor and modulates cellular splicing (40). The effects of SM on host cellular gene expression during lytic EBV replication remain to be fully characterized. When inducibly expressed in EBV-negative cells, SM has a broadly inhibitory effect on cellular mRNA accumulation (30). Nevertheless, SM causes several cellular transcripts to accumulate at higher levels (30). These transcripts include STAT1 and several interferon-stimulated genes. The STAT1 protein is an integral mediator of both type I (alpha/beta interferon [IFN-␣/␤]) and type II (IFN-␥) IFN signal transduction pathways (for a review, see reference 7). STAT1 is...