Epstein-Barr virus (EBV) infection is closely associated with nasopharyngeal carcinoma (NPC) and can be detected in early premalignant lesions of nasopharyngeal epithelium. The latent membrane protein 1 (LMP1) is an oncoprotein encoded by the EBV and is believed to play a role in transforming premalignant nasopharyngeal epithelial cells into cancer cells. RASSF1A is a tumor-suppressor gene commonly inactivated in many types of human cancer including NPC. In this study, we report a novel function of LMP1, in down-regulating RASSF1A expression in human epithelial cells. Downregulation of RASSF1A expression by LMP1 is dependent on the activation of intracellular signaling of NF-kappaB involving the C-terminal activating regions (CTARs) of LMP1. LMP1 expression also suppresses the transcriptional activity of the RASSF1A core promoter. RASSF1A stabilizes microtubules and regulates mitotic events. Aberrant mitotic spindles and chromosome aberrations are reported phenotypes in RASSF1A inactivated cells. In this study, we observed that LMP1 expression in human epithelial cells could induce aberrant mitotic spindles, disorganized interphase microtubules and aneuploidy. LMP1 expression could also suppress microtubule dynamics as exemplified by tracking movements of the growing tips of microtubules in live cells by transfecting EGFP-tagged EB1 into cells. The aberrant mitotic spindles and interphase microtubule organization induced by LMP1 could be rescued by transfecting RASSF1A expression plasmid into cells. Downregulation of RASSF1A expression by LMP1 may facilitate its role in transformation of premalignant nasopharyngeal epithelial cells into cancer cells.