The Epstein-Barr virus (EBV) latent membrane protein 1 (LMP1) is an integral membrane protein that functions as a constitutively activated member of the tumor necrosis factor receptor family. Whereas LMP1 has been shown to activate the NF-kappaB and mitogen-activated protein kinase pathways, these effects alone are unable to account for the profound oncogenic properties of LMP1. Here we show that LMP1 can activate phosphatidylinositol 3-kinase (PI3K), a lipid kinase responsible for activating a diverse range of cellular processes in response to extracellular stimuli. LMP1 was found to stimulate PI3K activity inducing phosphorylation and subsequent activation of Akt, a downstream target of PI3K responsible for promoting cell survival. Treatment of LMP1-expressing cells with the PI3K inhibitor LY294002 resulted in decreased cell survival. The tumor necrosis factor receptor-associated factor-binding domain of LMP1 was found to be responsible for PI3K activation. The ability of LMP1 to induce actin stress-fiber formation, a Rho GTPase-mediated phenomenon, was also dependent on PI3K activation. These data implicate PI3K activation in many of the LMP1-induced phenotypic effects associated with transformation and suggests that this pathway contributes both to the oncogenicity of this molecule and its role in the establishment of persistent EBV infection.