Kaposi's sarcoma (KS)-associated herpesvirus (KSHV)-encoded viral FLICE inhibitory protein (vFLIP) K13 is a potent activator of the nuclear factor-kappaB (NF-kappaB) pathway. In this study, we show that infection with KHSV and ectopic expression of K13, but not its NF-kappaB-defective mutant, suppressed the expression of CXCR4. Suppression of CXCR4 by KSHV and K13 was associated with upregulated expression of miR-146a, a microRNA that is known to bind to the 3'-untranslated region of CXCR4 mRNA. Reporter studies identified two NF-kappaB sites in the promoter of miR-146a that were essential for its activation by K13. Accordingly, ectopic expression of K13, but not its NF-kappaB-defective mutant or other vFLIPs, strongly stimulated the miR-146a promoter activity, which could be blocked by specific genetic and pharmacological inhibitors of the NF-kappaB pathway. Finally, expression of CXCR4 was downregulated in clinical samples of KS and this was accompanied by an increased expression of miR-146a. Our results show that K13-induced NF-kappaB activity suppresses CXCR4 through upregulation of miR-146a. Downregulation of CXCR4 expression by K13 may contribute to KS development by promoting premature release of KSHV-infected endothelial progenitors into the circulation.