The cellular reservoir for Kaposi sarcoma-associated herpesvirus (KSHV) infection in the hematopoietic compartment and mechanisms governing latent infection and reactivation remain undefined. To determine susceptibility of human CD34⁺ hematopoietic progenitor cells (HPCs) to infection with KSHV, purified HPCs were exposed to KSHV, and cells were differentiated in vitro and in vivo. Clonogenic colony-forming activity was significantly suppressed in KSHV-infected CD34⁺ cells, and viral DNA was predominantly localized to granulocyte-macrophage colonies differentiated in vitro. rKSHV.219 is a recombinant KSHV construct that expresses green fluorescent protein from a cellular promoter active during latency and red fluorescent protein from a viral lytic promoter. Infection of CD34⁺ HPCs with rKSHV.219 showed similar patterns of infection, persistence, and hematopoietic suppression in vitro in comparison with KSHV. rKSHV.219 infection was detected in human CD14⁺ and CD19⁺ cells recovered from NOD/SCID mouse bone marrow and spleen following reconstitution with rKSHV.219-infected CD34⁺ HPCs. These results suggest that rKSHV.219 establishes persistent infection in NOD/SCID mice and that virus may be disseminated following differentiation of infected HPCs into the B-cell and monocyte lineages. CD34⁺ HPCs may be a reservoir for KSHV infection and may provide a continuous source of virally infected cells in vivo. (Blood. 2006;108:141-151)