The Epstein-Barr virus (EBV) protein EBNA2 is a transcriptional activator that can be targeted to its DNA responsive elements by direct interaction with the cellular protein RBP-J kappa. RBP-J kappa is a ubiquitous factor, highly conserved between man, mouse and Drosophila, whose function in mammalian cells is largely unknown. Here we provide evidence that RBP-J kappa is a transcriptional repressor and, more importantly, that RBP-J kappa repression is mediated by a co-repressor. The function of the co-repressor could be counterbalanced by making a fusion protein (RBP-VP16) between RBP-J kappa and the VP16 activation domain. This RBP-VP16-mediated activation could be strongly increased by an EBNA2 protein deprived of its activation domain, but not by an EBNA2 protein incapable of making physical contact with RBP-J kappa. Our results suggest that EBNA2 activates transcription by both interfering with the function of a co-repressor recruited by RBP-J kappa and providing an activation domain.