Kaposi's sarcoma-associated herpesvirus (KSHV) is a double-stranded DNA (dsDNA) gammaherpesvirus with a poorly characterized lytic replication cycle. However, the lytic replication cycle of the alpha- and betaherpesviruses are well characterized. During lytic infection of alpha- and betaherpesviruses, the viral genome is replicated as a precursor form, which contains tandem genomes linked via terminal repeats (TRs). One genomic unit of the precursor form is packaged into a capsid and is cleaved at the TR by the terminase complex. While the alpha- and betaherpesvirus terminases are well characterized, the KSHV terminase remains poorly understood. KSHV open reading frame 7 (ORF7), ORF29, and ORF67.5 are presumed to be components of the terminase complex based on their homology to other terminase proteins. We previously reported that ORF7-deficient KSHV formed numerous immature soccer ball-like capsids and failed to cleave the TRs. ORF7 interacted with ORF29 and ORF67.5; however, ORF29 and ORF67.5 did not interact with each other. While these results suggested that ORF7 is important for KSHV terminase function and capsid formation, the function of ORF67.5 was completely unknown. Therefore, to analyze the function of ORF67.5, we constructed ORF67.5-deficient BAC16. ORF67.5-deficient KSHV failed to produce infectious virus and cleave the TRs, and numerous soccer ball-like capsids were observed in ORF67.5-deficient KSHV-harboring cells. Furthermore, ORF67.5 promoted the interaction between ORF7 and ORF29, and ORF29 increased the interaction between ORF67.5 and ORF7. Thus, our data indicated that ORF67.5 functions as a component of the KSHV terminase complex by contributing to TR cleavage, terminase complex formation, capsid formation, and virus production. IMPORTANCE Although the formation and function of the alpha- and betaherpesvirus terminase complexes are well understood, the Kaposi's sarcoma-associated herpesvirus (KSHV) terminase complex is still largely uncharacterized. This complex presumably contains KSHV open reading frame 7 (ORF7), ORF29, and ORF67.5. We were the first to report the presence of soccer ball-like capsids in ORF7-deficient KSHV-harboring lytic-induced cells. Here, we demonstrated that ORF67.5-deficient KSHV also formed soccer ball-like capsids in lytic-induced cells. Moreover, ORF67.5 was required for terminal repeat (TR) cleavage, infectious virus production, and enhancement of the interaction between ORF7 and ORF29. ORF67.5 has several highly conserved regions among its human herpesviral homologs. These regions were necessary for virus production and for the interaction of ORF67.5 with ORF7, which was supported by the artificial intelligence (AI)-predicted structure model. Importantly, our results provide the first evidence showing that ORF67.5 is essential for terminase complex formation and TR cleavage.