Promyelocytic leukemia protein (PML) nuclear bodies or nuclear domain 10s (ND10s) are multiprotein nuclear structures implicated in transcriptional and posttranscriptional gene regulation that are disrupted during replication of many DNA viruses. Interferon increases the size and number of PML nuclear bodies and stimulates transcription of several genes encoding PML nuclear body proteins. Moreover, some PML nuclear body proteins colocalize at sites of viral DNA synthesis and transcription. In this study, the relationship between lytic Epstein-Barr virus (EBV) replication and Sp110b, a PML nuclear body protein, was investigated. Sp110b is shown to physically and functionally interact with the EBV protein SM. SM is expressed early in the EBV replicative cycle and posttranscriptionally increases the level of target EBV lytic transcripts. SM bound to Sp110b via two distinct sites in Sp110b in an RNA-independent manner. SM also specifically induced expression of Sp110b during lytic EBV replication and in several cell types. Exogenous expression of Sp110b synergistically enhanced SM-mediated accumulation of intronless and lytic viral transcripts. This synergistic effect was shown to be promoter independent, posttranscriptional, and the result of increased stabilization of target transcripts. Finally, inhibiting Sp110b expression decreased accumulation of an SM-responsive lytic EBV transcript in EBV-infected cells. These findings imply that SM induces Sp110b expression, binds to Sp110b, and utilizes the recruited Sp110b protein to increase the stability of lytic EBV transcripts, indicating that Sp110b is a component of the cellular machinery that EBV utilizes to enhance lytic EBV replication.The Epstein-Barr virus (EBV) nuclear protein SM is expressed early after entry of EBV into the lytic cycle of replication and is essential for EBV virion production (12,19). SM increases the accumulation of several viral intronless lytic mRNA transcripts and specific cellular transcripts in both the nucleus and cytoplasm (38,40,42). SM also inhibits splicing and inhibits expression of the majority of cellular genes (38, 39). Thus, SM affects multiple cellular pathways involved in RNA processing and transport. In order to further elucidate its mechanism of action, we used the yeast two-hybrid assay to identify additional cellular proteins that interact with SM. During this investigation, we identified the promyelocytic leukemia protein (PML) nuclear body protein Sp110b, expressed from a splicing variant of Sp110 (4, 25), as a potential SM-interacting protein.PML nuclear bodies (also known as nuclear domain 10 proteins [ND10s]) are dynamic nuclear structures composed of numerous proteins, some of which localize to the PML nuclear body under specific environmental conditions (for review, see reference 13, 30). Their function is still largely unknown, but many PML nuclear body proteins, including Sp110, have been implicated in regulation of gene transcription. The number of PML nuclear bodies in the nucleus increases in response to hea...