The simian herpesvirus saimiri (HVS) induces malignant T cell lymphomas and is closely related to Kaposi's sarcoma-associated herpesvirus (KSHV or HHV-8). Both belong to the gamma-2 herpesvirus subgroup. The viral genome of HVS consists of a unique region (L-DNA) that contains all of the viral genes flanked by non-coding terminal repeats (H-DNA). Here we describe the cloning of a 113 kb restriction fragment containing the L-DNA of an oncogenic HVS strain in an F′ replicon-based E. coli vector. Cloned DNA was infectious and the ends of the progeny viral genome consisted of amplified tandem alternating repeats of vector and a single H-DNA unit. T cells infected with these viruses contained the linear DNA typically found a few weeks after infection, but were unable to form episomal circular viral DNA, which is the latent form of the viral genome. Recombinant viruses with reconstructed H-DNA were generated and T cells infected with these rescued viruses contained high copy numbers of episomal DNA. Plasmids expressing the latency-associated nuclear antigen (LANA) and containing various numbers of H-DNA repeats stably replicated as episomes, but constructs containing three repeat units produced the highest copy numbers. These data show that intact and multiple terminal repeats are essential components for episomal replication in latently infected T cells. Moreover, LANA and terminal repeats are sufficient for stable plasmid persistence. Cloned HVS can also be utilized for mutagenesis of HVS and for the expression of foreign genes through efficient manipulation of plasmids in E. coli.