Nasopharyngeal carcinoma (NPC) is closely associated with Epstein-Barr virus (EBV) infection. EBV episomes are detected in almost all NPC cells. The role of EBV in NPC pathogenesis has long been postulated but remains enigmatic. In contrast to infection of B lymphocytes, EBV infection does not directly transform nasopharyngeal epithelial cells into proliferative clones with malignant potential. EBV infection of normal pharyngeal epithelial cells is predominantly lytic in nature. Genetic alterations in premalignant nasopharyngeal epithelium, in combination with inflammatory stimulation in the nasopharyngeal mucosa, presumably play essential roles in the establishment of a latent EBV infection in infected nasopharyngeal epithelial cells during the early development of NPC. Establishment of latent EBV infection in premalignant nasopharyngeal epithelial cells and expression of latent viral genes, including the BART transcripts and BART-encoded microRNAs, are crucial features of NPC. Expression of EBV genes may drive further malignant transformation of premalignant nasopharyngeal epithelial cells into cancer cells. The difficulties involved in the establishment of NPC cell lines and the progressive loss of EBV epsiomes in NPC cells propagated in culture strongly implicate the contribution of host stromal components to the growth of NPC cells in vivo and maintenance of EBV in infected NPC cells. Defining the growth advantages of EBV-infected NPC cells in vivo will lead to a better understanding of the contribution of EBV infection in NPC pathogenesis, and may lead to the identification of novel therapeutic targets for NPC treatment.