Therapies that control largely T cell-dependent allograft rejection in humans also possess the undesirable effect of impairing T cell function, leaving transplant recipients susceptible to opportunistic viruses. Prime among these opportunists are the ubiquitous herpesviruses. To date, studies are lacking that address the effect of viruses that establish a true latent state on allograft tolerance or the effect of tolerance protocols on the immune control of latent viruses. By using a mixed chimerism-based tolerance-induction protocol, we found that mice undergoing latent infection with γHV68, a murine γ-herpesvirus closely related to human γ-herpesviruses such as EBV and Kaposi’s sarcoma-associated herpesvirus, significantly resist tolerance to allografts. Limiting the degree of virus reactivation or innate immune response did not reconstitute chimerism in latently infected mice. However, γHV68-infected mice showed increased frequency of CD8+ T cell alloreactivity and, interestingly, expansion of virus-induced, alloreactive, “effector/effector memory” TCR Vβ4+CD8+ T cells driven by the γHV68-M1 gene was associated with resistance to tolerance induction in studies using γHV68-M1 mutant virus. These results define the viral gene and immune cell types involved in latent infection-mediated resistance to allograft tolerance and underscore the influence of latent herpesviruses on allograft survival.