The Epstein-Barr virus LMP2A protein was expressed in a human keratinocyte cell line, HaCaT, and effects on epithelial cell growth were detected in organotypic raft cultures and in vivo in nude mice. Raft cultures derived from LMP2A-expressing cells were hyperproliferative, and epithelial differentiation was inhibited. The LMP2A-expressing HaCaT cells were able to grow anchorage independently and formed colonies in soft agar. HaCaT cells expressing LMP2A were highly tumorigenic and formed aggressive tumors in nude mice. The LMP2A tumors were poorly differentiated and highly proliferative, in contrast to occasional tumors that arose from parental HaCaT cells and vector control cells, which grew slowly and remained highly differentiated. Animals injected with LMP2A-expressing cells developed frequent metastases, which predominantly involved lymphoid organs. Involucrin, a marker of epithelial differentiation, and E-cadherin, involved in the maintenance of intercellular contact, were downregulated in LMP2A tumors. Whereas activation of the mitogen-activated protein kinase pathway was not observed, phosphatidylinositol-3-kinase (PI3-kinase)-dependent activation of the serine-threonine kinase Akt was detected in LMP2A-expressing cells and LMP2A tumors. Inhibition of this pathway blocked growth in soft agar. These data indicate that LMP2A greatly affects cell growth and differentiation pathways in epithelial cells, in part through activation of the PI3-kinase–Akt pathway.