After infecting peripheral sites, herpes simplex virus (HSV) invades the nervous system and initiates latent infection in sensory neurons. Establishment and maintenance of HSV latency requires host survival, and entails repression of productive cycle ("lytic") viral gene expression. We find that a neuron-specific microRNA, miR-138, represses expression of ICP0, a viral transactivator of lytic gene expression. A mutant HSV-1 (M138) with disrupted miR-138 target sites in ICP0 mRNA exhibits enhanced expression of ICP0 and other lytic proteins in infected neuronal cells in culture. Following corneal inoculation, M138-infected mice have higher levels of ICP0 and lytic transcripts in trigeminal ganglia during establishment of latency, and exhibit increased mortality and encephalitis symptoms. After full establishment of latency, the fraction of trigeminal ganglia harboring detectable lytic transcripts is greater in M138-infected mice. Thus, miR-138 is a neuronal factor that represses HSV-1 lytic gene expression, promoting host survival and viral latency.