Vascular endothelial growth factor (VEGF) and its receptors are highly expressed in Kaposi's sarcoma (KS) lesion and play a key role in angiogenesis. Latency-associated nuclear antigen (LANA) of Kaposi's sarcoma-associated herpesvirus (KSHV/HHV8) has multiple functions related to viral latency and KSHV-induced oncogenesis. In this report, we have identified Daxx as a LANA-binding protein by co-immunoprecipitation analysis of HeLa cells stably expressing LANA. LANA associated with Daxx in a PEL cell line infected with KSHV. LANA and Daxx also bound in vitro, suggesting direct interaction. From the results of binding assays, a region containing the Glu/Asp-rich domain within LANA, and a central region including the second paired amphipathic helix within Daxx contributed to the interaction. To address the physiological significance of this interaction, we focused on a Daxx-mediated VEGF receptor gene regulation. We found that Daxx repressed Ets-1-dependent Flt-1/VEGF receptor-1 gene expression, and that LANA inhibited the repression by Daxx in a reporter assay. Analyses of flow cytometry and real-time PCR revealed that expression of VEGF receptor-1 and -2 in LANA-expressing human umbilical vein endothelial cells (HUVECs) significantly increased. Co-immunoprecipitation and immunoblotting experiments suggested that LANA-bound Daxx to inhibit the interaction between Daxx and Ets-1. Chromatin immunoprecipitation assays showed that Daxx associated with VEGF receptor-1 promoter in HUVECs, and that LANA expression reduced this association. These results suggested that LANA contributes to a high expression of VEGF receptors in KS lesion by interfering with the interaction between Daxx and Ets-1.