Bone morphogenetic proteins (BMPs) are critically involved in early development and cell differentiation. In humans, dysfunction of the bone morphogenetic protein type II receptor (BMPR-II) is associated with pulmonary arterial hypertension (PAH) and neoplasia. The ability of Kaposi sarcoma-associated herpesvirus (KSHV), the etiologic agent of Kaposi sarcoma and primary effusion lymphoma, to down-regulate cell surface receptor expression is well documented. Here we show that KSHV infection reduces cell surface BMPR-II. We propose that this occurs through the expression of the viral lytic gene, K5, a ubiquitin E3 ligase. Ectopic expression of K5 leads to BMPR-II ubiquitination and lysosomal degradation with a consequent decrease in BMP signaling. The down-regulation by K5 is dependent on both its RING domain and a membrane-proximal lysine in the cytoplasmic domain of BMPR-II. We demonstrate that expression of BMPR-II protein is constitutively regulated by lysosomal degradation in vascular cells and provide preliminary evidence for the involvement of the mammalian E3 ligase, Itch, in the constitutive degradation of BMPR-II. Disruption of BMP signaling may therefore play a role in the pathobiology of diseases caused by KSHV infection, as well as KSHV-associated tumorigenesis and vascular disease.