Noncoding RNAs have substantial effects in host–virus interactions. Circular RNAs (circRNAs) are novel single-stranded noncoding RNAs which can decoy other RNAs or RNA-binding proteins to inhibit their functions. The role of circRNAs is largely unknown in the context of Kaposi’s sarcoma herpesvirus (KSHV). We hypothesized that circRNAs influence viral infection by inhibiting host and/or viral factors. Transcriptome analysis of KSHV-infected primary endothelial cells and a B cell line identified human circRNAs that are differentially regulated upon infection. We confirmed the expression changes with divergent PCR primers and RNase R treatment of specific circRNAs. Ectopic expression of hsa_circ_0001400, a circRNA induced by infection, suppressed expression of key viral latent gene LANA and lytic gene RTA in KSHV de novo infections. Since human herpesviruses express noncoding RNAs like microRNAs, we searched for viral circRNAs encoded in the KSHV genome. We performed circRNA-Seq analysis with RNase R-treated, circRNA-enriched RNA from KSHVinfected cells. We identified multiple circRNAs encoded by the KSHV genome that are expressed in KSHV-infected endothelial cells and primary effusion lymphoma (PEL) cells. The KSHV circRNAs are located within ORFs of viral lytic genes, are up-regulated upon the induction of the lytic cycle, and alter cell growth. Viral circRNAs were also detected in lymph nodes from patients of KSHV-driven diseases such as PEL, Kaposi’s sarcoma, and multicentric Castleman’s disease. We revealed new host–virus interactions of circRNAs: human antiviral circRNAs are activated in response to KSHV infection, and viral circRNA expression is induced in the lytic phase of infection.