A transcriptional activator encoded in open reading frame 50 (ORF50) of Kaposi's sarcoma-associated herpesvirus (KSHV) initiates the viral lytic cycle. ORF50 protein activates downstream KSHV target genes by at least two mechanisms: direct recognition of response elements in promoter DNA and interaction with cellular proteins bound to promoter DNA. We have identified a multifunctional regulatory region, present in amino acids (aa) 520 to 535 of ORF50 protein, that controls DNA binding and protein stability. Deletion of aa 521 to 534 or mutation of a basic motif (KKRK) in this regulatory region dramatically enhances DNA binding by ORF50 protein, as shown by electrophoretic mobility shift, DNA affinity chromatography, and chromatin immunoprecipitation assays. Deletion of the regulatory region and mutations in the KKRK motif also lead to abundant expression of an electrophoretic mobility variant, ORF50B, which appears to be a form of ORF50 protein that is decreased in posttranslational modification. Enhanced DNA binding and enhanced expression of ORF50B are independent phenomena. The regulatory region likely inhibits DNA binding through interactions with the DNA binding domain in aa 1 to 390 and destabilizes ORF50B through interactions with a domain located in aa 590 to 650. Mutants in the KKRK motif that are enhanced in DNA binding are nonetheless impaired in activating direct targets, such as polyadenylated nuclear RNA, and indirect targets, such as ORF50 itself. The identification of an autoregulatory region emphasizes that the many functions of ORF50 protein must be subject to exquisite control to achieve optimal KSHV lytic-cycle gene expression.