Infection of primary B-lymphocytes by Epstein-Barr virus (EBV) leads to growth transformation of these B-cells in vitro. EBV nuclear antigen 2 (EBNA2), one of the first genes expressed after EBV infection of B-cells, is a transcriptional activator of viral and cellular genes and is essential for the transforming potential of the virus. We generated conditional EBV mutants by expressing EBNA2 as chimeric fusion protein with the hormone binding domain of the estrogen receptor on the genetic background of the virus. Growth transformation of primary normal B-cells by mutant virus resulted in estrogen-dependent lymphoblastoid cell lines expressing the chimeric EBNA2 protein. In the absence of estrogen about half of the cells enter a quiescent non-proliferative state whereas the others die by apoptosis. EBNA2 is thus required not only for initiation but also for maintenance of transformation. Growth arrest occurred at G1 and G2 stages of the cell cycle, indicating that functional EBNA2 is required at different restriction points of the cell cycle. Growth arrest is reversible for G1/G0 cells as indicated by the sequential accumulation and modification of cell cycle regulating proteins. EBV induces the same cell cycle regulating proteins as polyclonal stimuli in primary B-cells. These data suggest that EBV is using a common pathway for B-cell activation bypassing the requirement for antigen, T-cell signals and growth factors.