Epstein Barr virus (EBV) is associated with B-cell lymphomas in posttransplant lymphoproliferative disease (PTLD). Latent membrane protein 1 (LMP1), the major oncogenic protein of EBV, promotes tumorigenesis through activation of NF-κB, Erk, p38, JNK and Akt. The Jak/STAT signal transduction pathway is also constitutively active in PTLD-associated EBV+ B-cell lymphomas. Here we determine the mechanism of Jak/STAT activation in EBV+ B-cell lymphomas and the role of LMP1 in this process. Immunoprecipitation studies revealed no direct interaction of LMP1 and JAK3, but known associations between JAK3 and common gamma chain, and between LMP1 and TRAF3, were readily detected in EBV+ B cell lines from patients with PTLD. An inducible LMP1 molecule expressed in EBV− BL41 Burkitt's cells demonstrated STAT activation only after prolonged LMP1 signaling. While LMP1 induced IFN-γ production in BL41 cells, IFN-γ receptor blockade and IFN-γ neutralization prior to LMP1 activation markedly decreased STAT1 activation and expression of LMP1-driven IFN-γ inducible genes. Understanding the mechanisms by which EBV induces cellular signal transduction pathways may facilitate development of new treatments for PTLD.