Kaposi's sarcoma-associated herpesvirus (KSHV) is the etiologic agent of primary effusion lymphoma (PEL), multicentric Castleman's disease (MCD), and the inflammation-driven neoplasm Kaposi's sarcoma (KS). A triad of processes, including abnormal proliferation of endothelial cells, aberrant angiogenesis, and chronic inflammation, characterize KS lesions. STAT3 is a key transcription factor governing these processes, and deregulation of STAT3 activity is linked to a wide range of cancers, including PEL and KS. Using primary human endothelial cells (ECs), I demonstrate that KSHV infection modulated STAT3 activation in two ways: (i) KSHV induced uncoupling of canonical tyrosine (Y) and serine (S) phosphorylation events while (ii) concomitantly inducing the phosphorylation and inactivation of TRIM28 (also known as KAP-1 or TIF-1ß), a newly identified negative regulator of STAT3 activity. KSHV infection of primary ECs induced chronic STAT3 activation characterized by a shift from the canonical dual P-STAT3 Y705 S727 form to a mono P-STAT3 S727 form. Expression of the latent protein kaposin B promoted the unique phosphorylation of STAT3 at S727, in the absence of Y705, activated the host kinase mitogen-activated protein kinase-activated protein (MAPKAP) kinase 2 (MK2), and stimulated increased expression of STAT3-dependent genes, including CCL5, in ECs. TRIM28-mediated repression of STAT3 is relieved by phosphorylation of S473, and in vitro kinase assays identified TRIM28 S473 as a bona fide target of MK2. Together, these data suggest that kaposin B significantly contributes to the chronic inflammatory environment that is a hallmark of KS by unique activation of the proto-oncogene STAT3, coupled with MK2-mediated inactivation of the STAT3 transcriptional repressor TRIM28.