Kaposi's sarcoma-associated herpesvirus (KSHV) is causally linked to several acquired immune deficiency syndrome-related malignancies, including Kaposi's sarcoma, primary effusion lymphoma (PEL) and a subset of multicentric Castleman's disease. Control of viral lytic replication is essential for KSHV latency, evasion of the host immune system and induction of tumours. Here, we show that deletion of a 14 microRNA (miRNA) cluster from the KSHV genome significantly enhances viral lytic replication as a result of reduced NF-κB activity. The miRNA cluster regulates the NF-κB pathway by reducing expression of IκBα protein, an inhibitor of NF-κB complexes. Computational and miRNA seed mutagenesis analyses were used to identify KSHV miR-K1, which directly regulates the IκBα protein level by targeting the 3′UTR of its transcript. Expression of miR-K1 is sufficient to rescue NF-κB activity and inhibit viral lytic replication, whereas inhibition of miR-K1 in KSHV-infected PEL cells has the opposite effect. Thus, KSHV encodes an miRNA to control viral replication by activating the NF-κB pathway. These results demonstrate an important role for KSHV miRNAs in regulating viral latency and lytic replication by manipulating the host survival pathway.