Murine gammaherpesvirus 68 (gammaHV68 or MHV68) is genetically related to the human gammaherpesviruses Epstein-Barr virus (EBV) and Kaposi's sarcoma-associated herpesvirus (KSHV), providing a useful system for in vivo studies of the virus-host relationship. To begin to address fundamental questions about the mechanisms of the establishment of gammaherpesvirus latency, we previously generated a replication-defective gammaHV68 lacking the expression of the single-stranded DNA binding protein encoded by orf6. In work presented here, we demonstrate that this mutant virus established a long-term infection in vivo that was molecularly identical to wild-type virus latency. Thus, despite the absence of an acute phase of lytic replication, the mutant virus established a chronic infection in which the viral genome (i) was maintained as an episome and (ii) expressed latency-associated, but not lytic replication-associated, genes. Macrophages purified from mice infected with the replication-defective virus harbored viral genome at a frequency that was nearly identical to that of wild-type gammaHV68; however, the frequency of B cells harboring viral genome was greatly reduced in the absence of lytic replication. Thus, this replication-defective gammaherpesvirus efficiently established in vivo infection in macrophages that was molecularly indistinguishable from wild-type virus latency. These data point to a critical role for lytic replication or reactivation in the establishment or maintenance of latent infection in B cells.