Latent membrane protein 1 (LMP1) is an EBV-encoded transforming protein that strongly mimics the B cell-activating properties of a normal cellular membrane protein, CD40. LMP1 and CD40 both associate with the cytoplasmic adapter proteins called TNFR-associated factors (TRAFs). TRAFs 1, 2, and 3 bind to a region of LMP1 that is essential for EBV to transform B lymphocytes, carboxyl-terminal activating region (CTAR) 1. However, studies of transiently overexpressed LMP1 molecules, primarily in epithelial cells, indicated that a second region, CTAR2, is largely responsible for LMP1-mediated activation of NF-kappaB and c-Jun N-terminal kinase. To better understand LMP1 signaling in B lymphocytes, we performed a structure-function analysis of the LMP1 C-terminal cytoplasmic domain stably expressed in B cell lines. Our results demonstrate that LMP1-stimulated Ig production, surface molecule up-regulation, and NF-kappaB and c-Jun N-terminal kinase activation require both CTAR1 and CTAR2, and that these two regions may interact to mediate LMP1 signaling. Furthermore, we find that the function of CTAR1, but not CTAR2, correlates with TRAF binding and present evidence that as yet unidentified cytoplasmic proteins may associate with LMP1 to mediate some of its signaling activities.