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Kaposi's sarcoma (KS) is an angioproliferative disease associated with infection by the human herpesvirus-8 (HHV-8). HHV-8 possesses genes including homologs of interleukin-8 (IL-8) receptor, Bcl-2, and cyclin D, which can potentially transform the host cell. However, the expression of these genes in KS tissues is very low or undetectable and HHV-8 does not seem to transform human cells in vitro. In addition, KS may not be a true cancer at least in the early stage. This indicated that besides its transforming potential, HHV-8 may act in KS pathogenesis also through indirect mechanisms. Evidence suggests that KS may start as an inflammatory-angiogenic lesion mediated by cytokines. However, little is known on the nature of the inflammatory cell infiltration present in KS, on the type of cytokines produced and on their role in KS, and whether this correlates with the presence of HHV-8. Here we show that both acquired immunodeficiency syndrome (AIDS)-KS and classical KS (C-KS) lesions are infiltrated by CD8+ T cells and CD14+/CD68+monocytes-macrophages producing high levels of ?-interferon (?IFN) which, in turn, promotes the formation of KS spindle cells with angiogenic phenotype. ?IFN, in fact, induces endothelial cells to acquire the same features of KS cells, including the spindle morphology and the pattern of cell marker expression. In addition, endothelial cells activated by ?IFN induce angiogenic lesions in nude mice closely resembling early KS. These KS-like lesions are accompanied by production of basic fibroblast growth factor, an angiogenic factor highly expressed in primary lesions that mediates angiogenesis and spindle cell growth. The formation of KS-like lesions is upregulated by the human immunodeficiency virus Tat protein demonstrating its role as a progression factor in AIDS-KS. Finally, ?IFN and HLA-DR expression correlate with the presence of HHV-8 in lesional and uninvolved tissues from the same patients. As HHV-8 infects both mononuclear cells infiltrating KS lesions and KS spindle cells, these results suggest that HHV-8 may elicit or participate in a local immune response characterized by infiltration of CD8+ T cells and intense production of ?IFN which, in turn, plays a key role in KS development.