Herpesviruses acquire their envelope by budding into the lumen of cytoplasmic membrane vesicles. This process is initiated by component(s) on viral particles, which recognize the budding site where the viral glycoproteins are present and recruit cellular cargo transport and sorting machinery to the site to complete the budding process. Proteins in the tegument layer, connecting capsid and envelope, are candidates for the recognition of budding sites on vesicle membrane and induction of budding and final envelopment. We examined several outer and matrix tegument proteins of Kaposi's sarcoma-associated herpesvirus (KSHV) and found that ORF45 associates with lipid rafts (LRs) of cellular membrane. LRs are membrane micro-domains, which have been implicated as relay stations in intracellular signaling and transport including viral entry and virion assembly. The ability of ORF45 to target LR is dependent on the mono-ubiquitylation of ORF45 at Lys297 as the mutation at Lys297 (K297R) abolished LR-association of ORF45. The K297R mutation also impairs ORF45 and viral particle co-localization with trans-Golgi network and endosomes, but facilitates ORF45 and viral particles co-localizing with lysosomes. More importantly, the recombinant KSHV carrying ORF45 K297R mutant (BAC-K297R) was found severely defective in producing mature and infectious virion particles in comparison to wild type KSHV (BAC16). Taken together, our results reveal a new function of KSHV tegument protein ORF45 in targeting LR of host cell membrane, promoting viral particles co-localization with trans-Golgi and endosome vesicles and facilitating the maturation and release of virion particles, suggesting that ORF45 plays a role in bringing KSHV particles to the budding site on cytoplasmic vesicle membrane and triggering the viral budding process for final envelopment and virion maturation.