Virus infection stimulates potent antiviral responses; specifically, Epstein-Barr virus (EBV) infection induces and activates interferon regulatory factor 7 (IRF-7), which is essential for production of alpha/beta interferons (IFN-alpha/beta) and upregulates expression of Tap-2. Here we present evidence that during cytolytic viral replication the immediate-early EBV protein BZLF-1 counteracts effects of IRF-7 that are central to host antiviral responses. We initiated these studies by examining IRF-7 protein expression in vivo in lesions of hairy leukoplakia (HLP) in which there is abundant EBV replication but the expected inflammatory infiltrate is absent. This absence might predict that factors involved in the antiviral response are absent or inactive. First, we detected significant levels of IRF-7 in the nucleus, as well as in the cytoplasm, of cells in HLP lesions. IRF-7 activity in cell lines during cytolytic viral replication was examined by assay of the IRF-7-responsive promoters, IFN-alpha4, IFN-beta, and Tap-2, as well as of an IFN-stimulated response element (ISRE)-containing reporter construct. These reporter constructs showed consistent reduction of activity during lytic replication. Both endogenous and transiently expressed IRF-7 and EBV BZLF-1 proteins physically associate in cell culture, although BZLF-1 had no effect on the nuclear localization of IRF-7. However, IRF-7-dependent activity of the IFN-alpha4, IFN-beta, and Tap-2 promoters, as well as an ISRE promoter construct, was inhibited by BZLF-1. This inhibition occurred in the absence of other EBV proteins and was independent of IFN signaling. Expression of BZLF-1 also inhibited activation of IRF-7 by double-stranded RNA, as well as the activity of a constitutively active mutant form of IRF-7. Negative regulation of IRF-7 by BZLF-1 required the activation domain but not the DNA-binding domain of BZLF-1. Thus, EBV may subvert cellular antiviral responses and immune detection by blocking the activation of IFN-alpha4, IFN-beta, and Tap-2 by IRF-7 through the medium of BZLF-1 as a negative regulator.