Infected cells recognize viral replication as a DNA damage stress and elicit a DNA damage response that ultimately induces apoptosis as part of host immune surveillance. Here, we demonstrate a novel mechanism where the murine gamma herpesvirus 68 (gammaHV68) latency-associated, anti-interferon M2 protein inhibits DNA damage-induced apoptosis by interacting with the DDB1/COP9/cullin repair complex and the ATM DNA damage signal transducer. M2 expression constitutively induced DDB1 nuclear localization and ATM kinase activation in the absence of DNA damage. Activated ATM subsequently induced Chk activation and p53 phosphorylation and stabilization without eliciting H2AX phosphorylation and MRN recruitment to foci upon DNA damage. Consequently, M2 expression inhibited DNA repair, rendered cells resistant to DNA damage-induced apoptosis, and induced a G(1) cell cycle arrest. Our results suggest that gammaHV68 M2 blocks apoptosis-mediated intracellular innate immunity, which might ultimately contribute to its role in latent infection.