Human herpesvirus 8 (HHV-8) is found in immunoblastic B cells of patients with multicentric Castleman's disease (MCD) and, predominantly in a latent form, in primary effusion lymphoma (PEL) cells and Kaposi's sarcoma (KS) spindle cells. Recent studies have shown that upon reactivation, HHV-8 expresses factors that downregulate major histocompatibility class I proteins and coactivation molecules and that may enable productively infected cells to escape cytotoxic T lymphocytes and natural killer cell responses. One of these viral factors is encoded by open reading frame (ORF) K3. Here we show that in PEL cells, ORF K3 is expressed through viral transcripts that are induced very early upon virus reactivation, including bicistronic RNA molecules containing coding sequences from viral ORFs K3 and 70. Specifically, we found that a bicistronic transcript was expressed in the absence of de novo protein synthesis, thereby identifying a novel HHV-8 immediate-early gene product. Several features of the RNA molecules encoding the K3 product, including multiple transcriptional start sites, multiple donor splicing sites, and potential alternative ATG usage, suggest that there exists a finely tuned modulation of ORF K3 expression. By contrast, ORF K3 transcripts are not detected in the majority of cells present in KS lesions that are latently infected by the virus, suggesting that there are other, as-yet-unknown mechanisms of immune evasion for infected KS spindle cells. Nevertheless, because HHV-8 viremia precedes the development of KS lesions and is associated with the recrudescence of MCD symptoms, the prompt expression of ORF K3 in productively infected circulating cells may be important for virus pathogenesis. Thus, molecules targeting host or viral factors that activate ORF K3 expression or inactivate the biological functions of the K3 product should be exploited for the prevention or treatment of HHV-8-associated diseases in at-risk individuals.