The Kaposi sarcoma-associated herpesvirus (KSHV; or human herpesvirus-8)-encoded protein called K-bZIP (also named K8) was found to be multifunctional. In this study, we discovered that K-bZIP interacts with histone deacetylase (HDAC) 1/2 in 12-O-tetradecanoylphorbol-13-acetate-stimulated BCBL-1 lymphocyte cells. K-bZIP appears to repress HDAC activity through this interaction, which we determined to be independent of K-bZIP SUMOylation. We dissected the domains of K-bZIP and found that the leucine zipper (LZ) domain is essential for the interaction of K-bZIP and HDAC. In addition, we constructed a KSHV bacterial artificial chromosome (BAC) with LZ domain-deleted K-bZIP (KSHVdLZ) and transfected this mutated KSHV BAC DNA into HEK 293T cells. As a result, it was consistently found that K-bZIP without its LZ domain failed to interact with HDAC2. We also showed that the interaction between K-bZIP and HDAC is necessary for the inhibition of the lytic gene promoters (ORF50 and OriLyt) of KSHV by K-bZIP. Furthermore, we found that the LZ domain is also important for the interaction of K-bZIP with the promoters of ORF50 and OriLyt. Most interestingly, although it was found to have suppressive effects on the promoters of ORF50 and OriLyt, KSHVdLZ replicates at a significantly lower level than its BAC-derived revertant (KSHVdLZRev) or KSHVWT (BAC36) in HEK 293T cells. The defectiveness of KSHVdLZ replication can be partially rescued by siRNA against HDAC2. Our results suggest that the function of K-bZIP interaction with HDAC is two-layered. 1) K-bZIP inhibits HDAC activity generally so that KSHVdLZ replicates at a lower level than does KSHVWT. 2) K-bZIP can recruit HDAC to the promoters of OriLyt and ORF50 through interaction with HDAC for K-bZIP to have a temporary repressive effect on the two promoters.