Kaposi's sarcoma (KS)-associated herpesvirus (KSHV) (also known as human herpesvirus 8) latently infects KS tumors, primary effusion lymphomas (PELs), and PEL cell lines. In latently infected cells, KSHV DNA is maintained as circularized, extrachromosomal episomes. To persist in proliferating cells, KSHV episomes must replicate and efficiently segregate to progeny nuclei. In uninfected B-lymphoblastoid cells, KSHV latency-associated nuclear antigen (LANA1) is necessary and sufficient for persistence of artificial episomes containing specific KSHV DNA. In previous work, the cis-acting sequence required for episome persistence contained KSHV terminal-repeat (TR) DNA and unique KSHV sequence. We now show that cis-acting KSHV TR DNA is necessary and sufficient for LANA1-mediated episome persistence. Furthermore, LANA1 binds TR DNA in mobility shift assays and a 20-nucleotide LANA1 binding sequence has been identified. Since LANA1 colocalizes with KSHV episomes along metaphase chromosomes, these results are consistent with a model in which LANA1 may bridge TR DNA to chromosomes during mitosis to efficiently segregate KSHV episomes to progeny nuclei.