Human gamma herpesviruses, including Kaposi's sarcoma-associated herpesvirus (KSHV) and Epstein-Barr virus (EBV), are capable of inducing tumors, particularly in in immune-compromised individuals. Due to the stringent host tropism, rodents are resistant to infection by human gamma herpesviruses, creating a significant barrier for the in vivo study of viral genes that contribute to tumorigenesis. The closely-related murine gamma herpesvirus 68 (γHV68) efficiently infects laboratory mouse strains and establishes robust persistent infection without causing apparent disease. Here, we report that a recombinant γHV68 carrying the KSHV G protein-coupled receptor (kGPCR) in place of its murine counterpart induces angiogenic tumors in infected mice. Although viral GPCRs are conserved in all gamma herpesviruses, kGPCR potently activated downstream signaling and induced tumor formation in nude mouse, whereas γHV68 GPCR failed to do so. Recombinant γHV68 carrying kGPCR demonstrated more robust lytic replication ex vivo than wild-type γHV68, although both viruses underwent similar acute and latent infection in vivo. Infection of immunosuppressed mice with γHV68 carrying kGPCR, but not wild-type γHV68, induced tumors in mice that exhibited angiogenic and inflammatory features shared with human Kaposi's sarcoma. Immunohistochemistry staining identified abundant latently-infected cells and a small number of cells supporting lytic replication in tumor tissue. Thus, mouse infection with a recombinant γHV68 carrying kGPCR provides a useful small animal model for tumorigenesis induced by a human gamma herpesvirus gene in the setting of a natural course of infection.