Epstein-Barr virus (EBV) recombinants with specifically mutated BCRF1 genes were constructed and compared with wild-type BCRF1 recombinants derived in parallel for the ability to initiate and maintain latent infection and growth transformation in primary human B lymphocytes. A stop codon insertion after codon 116 of the 170-codon BCRF1 open reading frame or deletion of the entire gene had no effect on latent infection, B-lymphocyte proliferation into long-term lymphoblastoid cell lines (LCLs), or virus replication. LCLs infected with the stop codon recombinant were indistinguishable from wild-type recombinant-infected LCLs in tumorigenicity in SCID mice. However, mutant BCRF1 recombinant-infected cells differed from wild-type recombinant-infected cells in their inability to block gamma interferon release in cultures of permissively infected LCLs incubated with autologous human peripheral blood mononuclear cells. This is the first functional assay for BCRF1 expression from the EBV genome. BCRF1 probably plays a key role in modulating the specific and nonspecific host responses to EBV infection.