Uracil-DNA glycosylases (UDGs) of the uracil-N-glycosylase (UNG) family are the primary DNA repair enzymes responsible for removal of inappropriate uracil from DNA. Recent studies further suggest that the nuclear human UNG2 and the UDGs of large DNA viruses may coordinate with their DNA polymerase accessory factors to enhance DNA replication. Based on its amino acid sequence, the putative UDG of Epstein-Barr virus (EBV), BKRF3, belongs to the UNG family of proteins, and it was demonstrated previously to enhance oriLyt-dependent DNA replication in a cotransfection replication assay. However, the expression and enzyme activity of EBV BKRF3 have not yet been characterized. In this study, His-BKRF3 was expressed in bacteria and purified for biochemical analysis. Similar to the case for the Escherichia coli and human UNG enzymes, His-BKRF3 excised uracil from single-stranded DNA more efficiently than from double-stranded DNA and was inhibited by the purified bacteriophage PBS1 inhibitor Ugi. In addition, BKRF3 was able to complement an E. coli ung mutant in rifampin and nalidixic acid resistance mutator assays. The expression kinetics and subcellular localization of BKRF3 products were detected in EBV-positive lymphoid and epithelial cells by using BKRF3-specific mouse antibodies. Expression of BKRF3 is regulated mainly by the immediate-early transcription activator Rta. The efficiency of EBV lytic DNA replication was slightly affected by BKRF3 small interfering RNA (siRNA), whereas cellular UNG2 siRNA or inhibition of cellular and viral UNG activities by expressing Ugi repressed EBV lytic DNA replication. Taking these results together, we demonstrate the UNG activity of BKRF3 in vitro and in vivo and suggest that UNGs may participate in DNA replication or repair and thereby promote efficient production of viral DNA.