Kaposi's sarcoma (KS) is a complex cancer characterized by angioproliferative multifocal tumors of the skin, mucosa and viscera. KS lesions are comprised of both distinctive spindle cells of endothelial origin and a variable inflammatory infiltrate. There are four different epidemiological forms of KS: classic (sporadic), African (endemic), AIDS-associated (epidemic), and immunosupression-associated (iatrogenic). Although these various forms of KS have different environmental and immunological components, the development of each depends upon infection with Kaposi's sarcoma herpesvirus/human herpesvirus-8 (KSHV/HHV8). KSHV encodes an arsenal of gene products that induce cellular proliferation, transformation, cell signaling, cytokine production, immune evasion, antiapoptosis and angiogenesis. Yet, KSHV alone is insufficient to give rise to KS. The exact origin of the tumor cell (spindle cell), which is generally agreed to be a type of endothelial cell, remains elusive. Current evidence supports their derivation from lymphatic endothelium. However, both lymphatic and vascular endothelial cell types can be infected by KSHV in vitro, and recent studies suggest that this virus may reprogram the target cell, thus masking the cell's true origin. It is also possible that the original target cell is an uncommitted progenitor. In addition to the potentially neoplastic spindle cells, the KS lesion also contains dendritic cells, macrophages, plasma cells and lymphocytes. The presence of this admixed immune infiltrate has led to the suggestion that KS may result from reactive hyperproliferation induced by chronic inflammation, and that it is therefore not a true neoplasm. This review details the data that support KS as a model of both oncogenesis and chronic inflammation.