In one of the earliest events in human cytomegalovirus (HCMV)-infected cells, the major immediate-early (IE) protein IE1 initially targets to and then disrupts the nuclear structures known as PML oncogenic domains (PODs) or nuclear domain 10. Recent studies have suggested that modification of PML by SUMO is essential to form PODs and that IE1 both binds to PML and may disrupt PODs by preventing or removing SUMO adducts on PML. In this study, we showed that in contrast to herpes simplex virus type 1 (HSV-1) IE110 (ICP0), the loss of sumoylated forms of PML by cotransfected IE1 was resistant to the proteasome inhibitor MG132 and that IE1 did not reduce the level of unmodified PML. Reduced sumoylation of PML was also observed in U373 cells after infection with wild-type HCMV and proved to require IE1 protein expression. Mutational analysis revealed that the central hydrophobic domain of IE1, including Leu174, is required for both PML binding and loss of PML sumoylation and confirmed that all IE1 mutants tested that were deficient in these functions also failed both to target to PODs and to disrupt PODs. These same mutants were also inactive in several reporter gene transactivation assays and in inhibition of PML-mediated repression. Importantly, a viral DNA genome containing an IE1 gene with a deletion [IE1(Delta290-320)] that was defective in these activities was not infectious when transfected into permissive fibroblast cells, but the mutant IE1(K450R), which is defective in IE1 sumoylation, remained infectious. Our mutational analysis strengthens the idea that interference by IE1 with both the sumoylation of PML and its repressor activity requires a physical interaction with PML that also leads to disruption of PODs. These activities of IE1 also correlate with several unusual transcriptional transactivation functions of IE1 and may be requirements for efficient initiation of the lytic cycle in vivo.