Kaposi's sarcoma-associated herpesvirus (KSHV, human herpesvirus 8, or HHV-8) was firstly discovered in Kaposi's sarcoma tissue derived from patients with acquired immune deficiency syndrome. KSHV infection is associated with malignancies and certain inflammatory conditions. In addition to Kaposi's sarcoma, KSHV has been detected in primary effusion lymphoma, KSHV-associated lymphoma, and some cases of multicentric Castleman disease (MCD). Recently, KSHV inflammatory cytokine syndrome (KICS) was also defined as a KSHV-associated disease. In KSHV-associated malignancies, such as Kaposi's sarcoma and lymphoma, KSHV latently infects almost all tumor cells, and lytic proteins are rarely expressed. A high titer of KSHV is detected in the sera of patients with MCD and KICS, and the expression of lytic proteins such as ORF50, vIL-6, and vMIP-I and vMIP-II is frequently observed in the lesions of patients with these diseases. Immunohistochemistry of LANA-1 is an important diagnostic tool for KSHV infection. However, much of the pathogenesis of KSHV remains to be elucidated, especially regarding oncogenesis. Some viral proteins have been shown to have transforming activity in mammalian cells; however, these proteins are not expressed in latently KSHV-infected cells. KSHV encodes homologs of cellular proteins in its genome such as cyclin D, G-protein coupled protein, interleukin-6, and macrophage inflammatory protein-1 and -2. Molecular mimicry by these viral proteins may contribute to the establishment of microenvironments suitable for tumor growth. In this review, the virus pathogenesis is discussed based on pathological and experimental findings and clinical aspects.