Epstein-Barr virus (EBV) latent membrane protein 1 (LMP1) induces multiple signal transduction pathways during latent EBV infection via its C-terminal activating region 1 (CTAR1), CTAR2, and the less-studied CTAR3. One mechanism by which LMP1 regulates cellular activation is through the induction of protein posttranslational modifications, including phosphorylation and ubiquitination. We recently documented that LMP1 induces a third major protein modification by physically interacting with the SUMO-conjugating enzyme Ubc9 through CTAR3 and inducing the sumoylation of cellular proteins in latently infected cells. We have now identified a specific target of LMP1-induced sumoylation, interferon regulatory factor 7 (IRF7). We hypothesize that during EBV latency, LMP1 induces the sumoylation of IRF7, limiting its transcriptional activity and modulating the activation of innate immune responses. Our data show that endogenously sumoylated IRF7 is detected in latently infected EBV lymphoblastoid cell lines. LMP1 expression coincided with increased sumoylation of IRF7 in a CTAR3-dependent manner. Additional experiments show that LMP1 CTAR3-induced sumoylation regulates the expression and function of IRF7 by decreasing its turnover, increasing its nuclear retention, decreasing its DNA binding, and limiting its transcriptional activation. Finally, we identified that IRF7 is sumoylated at lysine 452. These data demonstrate that LMP1 CTAR3 does in fact function in intracellular signaling, leading to biologic effects. We propose that CTAR3 is an important signaling region of LMP1 that regulates protein function by sumoylation. We have shown specifically that LMP1 CTAR3, in cooperation with CTAR2, can limit the ability of IRF7 to induce innate immune responses by inducing the sumoylation of IRF7.