To explore the role of p16(INK4a) as an intrinsic barrier to B cell transformation by EBV, we transformed primary B cells from an individual homozygous for a deletion in the CDKN2A locus encoding p16(INK4a) and p14(ARF). Using recombinant EBV-BAC viruses expressing conditional EBNA3C (3CHT), we developed a system that allows inactivation of EBNA3C in lymphoblastoid cell lines (LCLs) lacking active p16(INK4a) protein but expressing a functional 14(ARF)-fusion protein (p14/p16). The INK4a locus is epigenetically repressed by EBNA3C--in cooperation with EBNA3A--despite the absence of functional p16(INK4a). Although inactivation of EBNA3C in LCLs from normal B cells leads to an increase in p16(INK4a) and growth arrest, EBNA3C inactivation in the p16(INK4a)-null LCLs has no impact on the rate of proliferation, establishing that the repression of INK4a is a major function of EBNA3C in EBV-driven LCL proliferation. This conditional LCL system allowed us to use microarray analysis to identify and confirm genes regulated specifically by EBNA3C, independently of proliferation changes modulated by the p16(INK4a)-Rb-E2F axis. Infections of normal primary B cells with recombinant EBV-BAC virus from which EBNA3C is deleted or with 3CHT EBV in the absence of activating ligand 4-hydroxytamoxifen, revealed that EBNA3C is necessary to overcome an EBV-driven increase in p16(INK4a) expression and concomitant block to proliferation 2-4 weeks post-infection. If cells are p16(INK4a)-null, functional EBNA3C is dispensable for the outgrowth of LCLs.