Evasion of immune T cell responses is crucial for viruses to establish persistence in the infected host. Immune evasion mechanisms of Epstein-Barr virus (EBV) in the context of MHC-I antigen presentation have been well studied. In contrast, viral interference with MHC-II antigen presentation is less well understood, not only for EBV but also for other persistent viruses. Here we show that the EBV encoded BZLF1 can interfere with recognition by immune CD4(+) effector T cells. This impaired T cell recognition occurred in the absence of a reduction in the expression of surface MHC-II, but correlated with a marked downregulation of surface CD74 on the target cells. Furthermore, impaired CD4(+) T cell recognition was also observed with target cells where CD74 expression was downregulated by shRNA-mediated inhibition. BZLF1 downregulated surface CD74 via a post-transcriptional mechanism distinct from its previously reported effect on the CIITA promoter. In addition to being a chaperone for MHC-II αβ dimers, CD74 also functions as a surface receptor for macrophage Migration Inhibitory Factor and enhances cell survival through transcriptional upregulation of Bcl-2 family members. The immune-evasion function of BZLF1 therefore comes at a cost of induced toxicity. However, during EBV lytic cycle induced by BZLF1 expression, this toxicity can be overcome by expression of the vBcl-2, BHRF1, at an early stage of lytic infection. We conclude that by inhibiting apoptosis, the vBcl-2 not only maintains cell viability to allow sufficient time for synthesis and accumulation of infectious virus progeny, but also enables BZLF1 to effect its immune evasion function.