Kaposi's sarcoma-associated herpesvirus (KSHV) can be driven into the lytic cycle in vitro by phorbol esters and sodium butyrate. This report begins to analyze the process by which butyrate activates the promoter of KSHV open reading frame 50 (ORF50), the key viral regulator of the KSHV latency to lytic cycle switch. A short fragment of the promoter, 134 nucleotides upstream of the translational start of ORF50, retained basal uninduced activity and conferred maximal responsiveness to sodium butyrate. The butyrate response element was mapped to a consensus Sp1-binding site. By means of electrophoretic mobility shift assays, both Sp1 and Sp3 were shown to form complexes in vitro with the ORF50 promoter at the Sp1 site. Butyrate induced the formation of a group of novel complexes, including several Sp3-containing complexes, one Sp1-containing complex, and several other complexes that were not identified with antibodies to Sp1 or Sp3. Formation of all butyrate-induced DNA-protein complexes was mediated by the consensus Sp1 site. In insect and mammalian cell lines, Sp1 significantly activated the ORF50 promoter linked to luciferase. Chromatin immunoprecipitation experiments in a PEL cell line showed that butyrate induced Sp1, CBP, and p300 binding to the ORF50 promoter in vivo in an on-off manner. The results suggest that induction of the KSHV lytic cycle by butyrate is mediated through interactions at the Sp1/Sp3 site located 103 to 112 nucleotides upstream of the translational initiation of ORF50 presumably by enhancing the binding of Sp1 to this site.