The Epstein-Barr virus (EBV) EBNA-1 protein has a central role in the maintenance of a latent EBV infection and is the only virus-encoded protein expressed in all EBV-associated tumors. EBNA-1 is required for replication of the episomal form of the latent viral genome and transactivates the latency C and LMP-1 promoters. The mechanisms by which EBNA-1 performs these functions are not known. Here we describe the cloning, expression, and characterization of a cellular protein, P32/TAP, which strongly interacts with EBNA-1. We show that P32/TAP is expressed at high levels in Raji cells and is synthesized as a proprotein of 282 amino acids (aa) that is posttranslationally processed by a two-step cleavage process to yield a mature protein of 209 aa. It has been previously reported that P32/TAP is expressed on the cell surface. Our transient expression assays detected full-length P32/TAP (1-282 aa) in the cytoplasm while mature P32/TAP protein localized to the nucleus. Three lines of evidence support P32/TAP interaction with EBNA-1. First, in the yeast two-hybrid system we mapped two interactive N-terminal regions of EBNA-1, aa 40-60 and aa 325-376, each of which contains arginine-glycine repeats. These regions interact with the C-terminal half of P32/TAP. Second, the full-length cytoplasmic P32/TAP protein can translocate nuclear EBNA-1 into the cytoplasm. Third, P32/TAP co-immunoprecipitated with EBNA-1. We have confirmed that a Gal4 fusion protein containing the C-terminal region of P32/TAP (aa 244-282) transactivates expression from a reporter containing upstream Gal4-binding sites. Deletion of the P32/TAP interactive regions of EBNA-1 severely diminished EBNA-1 transactivation of FRTKCAT in transient expression assays. Our data suggest that interaction with P32/TAP may contribute to EBNA-1-mediated transactivation.