Kaposi's sarcoma herpesvirus (KSHV) is the etiologic agent for primary effusion lymphoma (PEL), a non-Hodgkin type lymphoma manifesting as an effusion malignancy in the affected individual. Although KSHV has been recognized as a tumor virus for over a decade, the pathways for its tumorigenic conversion are incompletely understood, which has greatly hampered the development of efficient therapies for KSHV-induced malignancies like PEL and Kaposi's sarcoma. There are no current therapies effective against the aggressive, KSHV-induced PEL. Here we demonstrate that activation of the p53 pathway using murine double minute 2 (MDM2) inhibitor Nutlin-3a conveyed specific and highly potent activation of PEL cell killing. Our results demonstrated that the KSHV latency-associated nuclear antigen (LANA) bound to both p53 and MDM2 and that the MDM2 inhibitor Nutlin-3a disrupted the p53-MDM2-LANA complex and selectively induced massive apoptosis in PEL cells. Together with our results indicating that KSHV-infection activated DNA damage signaling, these findings contribute to the specificity of the cytotoxic effects of Nutlin-3a in KSHV-infected cells. Moreover, we showed that Nutlin-3a had striking antitumor activity in vivo in a mouse xenograft model. Our results therefore present new options for exploiting reactivation of p53 as what we believe to be a novel and highly selective treatment modality for this virally induced lymphoma.