KSHV is the causative agent of Kaposi sarcoma (KS), a spindle-shaped endothelial cell neoplasm accompanied by an inflammatory infiltrate. To evaluate the role of KSHV vFLIP in the pathogenesis of KS, we constructed mice with inducible expression of vFLIP in endothelial cells. Abnormal cells with endothelial marker expression and fusiform appearance were observed in several tissues reminiscent of the spindle cells found in KS. Serum cytokines displayed a profound perturbation similar to that described in KSHV inflammatory cytokine syndrome (KICS), a recently described clinical condition characterized by elevated IL6 and IL10. An increased myeloid component with suppressive immune phenotype was found, which may contribute to functional changes in the microenvironment and cellular heterogeneity as observed in KS. These mice represent the first in vivo demonstration that vFLIP is capable of inducing vascular abnormalities and changes in host microenvironment with important implications for understanding the pathogenesis and treating KSHV-associated diseases.