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Epstein-Barr virus (EBV) infection is associated with several human malignancies. Interferon (IFN) regulatory factor 7 (IRF-7) has several splicing variants, and at least the major splicing variant (IRF-7A) has oncogenic potential and is associated with EBV transformation processes. IRF-7C is an alternative splicing variant with only the DNA-binding domain of IRF-7. Whether IRF-7C is present under physiological conditions and its functions in viral transformation are unknown. In this report, we prove the existence of IRF-7C protein and RNA in certain cells under physiological conditions, and find that high levels of IRF-7C are associated with EBV transformation of human primary B cells in vitro as well as EBV type III latency. EBV latent membrane protein 1 (LMP-1) stimulates IRF-7C expression in B lymphocytes. IRF-7C has oncogenic potential in rodent cells and partially restores the growth properties of EBV-transformed cells under a growth-inhibition condition. A tumor array experiment has identified six primary tumor specimens with high levels of IRF-7C protein—all of them are lymphomas. Furthermore, we show that the expression of IRF-7C is apparently closely associated with other IRF-7 splicing variants. IRF- 7C inhibits the function of IRF-7 in transcriptional regulation of IFN genes. These data suggest that EBV may use splicing variants of IRF-7 for its transformation process in two strategies: to use oncogenic properties of various IRF-7 splicing variants, but use one of its splicing variants (IRF-7C) to block the IFN-induction function of IRF-7 that is detrimental for viral transformation. The work provides a novel relation of host/virus interactions, and has expanded our knowledge about IRFs in EBV transformation.