Murine gammaherpesvirus 68 (MHV68) establishes long-term latency in memory B cells similar to the human gammaherpesvirus Epstein Barr Virus (EBV). EBV encodes an interleukin-10 (IL-10) homolog and modulates cellular IL-10 expression; however, the role of IL-10 in the establishment and/or maintenance of chronic EBV infection remains unclear. Notably, MHV68 does not encode an IL-10 homolog, but virus infection has been shown to result in elevated serum IL-10 levels in wild-type mice, and IL-10 deficiency results in decreased establishment of virus latency. Here we show that a unique MHV68 latency-associated gene product, the M2 protein, is required for the elevated serum IL-10 levels observed at 2 weeks post-infection. Furthermore, M2 protein expression in primary murine B cells drives high level IL-10 expression along with increased secretion of IL-2, IL-6, and MIP-1α. M2 expression was also shown to significantly augment LPS driven survival and proliferation of primary murine B cells. The latter was dependent on IL-10 expression as demonstrated by the failure of IL10-/- B cells to proliferate in response to M2 protein expression and rescue of M2-associated proliferation by addition of recombinant murine IL-10. M2 protein expression in primary B cells also led to upregulated surface expression of the high affinity IL-2 receptor (CD25) and the activation marker GL7, along with down-regulated surface expression of B220, MHC II, and sIgD. The cells retained CD19 and sIgG expression, suggesting differentiation to a pre-plasma memory B cell phenotype. These observations are consistent with previous analyses of M2-null MHV68 mutants that have suggested a role for the M2 protein in expansion and differentiation of MHV68 latently infected B cells - perhaps facilitating the establishment of virus latency in memory B cells. Thus, while the M2 protein is unique to MHV68, analysis of M2 function has revealed an important role for IL-10 in MHV68 pathogenesis - identifying a strategy that appears to be conserved between at least EBV and MHV68. © 2008 Siegel et al.