JC virus, JCV, is a human neurotropic polyomavirus whose replication in glial cells causes the fatal demyelinating disease progressive multifocal leukoencephalopathy (PML). In addition, JCV possesses oncogenic activity and expression of its transforming protein, large T-antigen (T-Ag), in several experimental animals induces tumors of neural origin. Further, the presence of JCV DNA and T-Ag have been repeatedly observed in several human malignant tissues including primitive neuroectodermal tumors and glioblastomas. Earlier studies have demonstrated that Bag3, a member of the Bcl-2-associated athanogene (Bag) family of proteins, which is implicated in autophagy and apoptosis, is downregulated upon JCV infection of glial cells and that JCV T-Ag is responsible for suppressing the activity of the BAG3 promoter. Here, we investigated the possible impact of Bag3 on T-Ag expression in JCV-infected human primary glial cells as well as in cells derived from T-Ag-induced medulloblastoma in transgenic animals. Results from these studies revealed that overexpression of Bag3 drastically decreases the level of T-Ag expression by inducing the autophagic degradation of the viral protein. Interestingly, this event leads to the inhibition of JCV infection of glial cells, suggesting that the reduced levels of T-antigen seen upon the overexpression of Bag3 has a biological impact on the viral lytic cycle. Results from protein-protein interaction studies showed that T-Ag and Bag3 physically interact with each other through the zinc-finger of T-Ag and the proline rich domains of Bag3, and this interaction is important for the autophagic degradation of T-Ag. Our observations open a new avenue of research for better understanding of virus-host interaction by investigating the interplay between T-Ag and Bag3, and their impact on the development of JCV-associated diseases.