The major transmission route for Kaposi sarcoma-associated herpesvirus (KSHV) infection is the oral cavity through saliva. Kaposi sarcoma (KS) frequently occurs in the oral cavity in HIV-positive individuals and is often the first presenting sign of AIDS. However, the oral target cells for KSHV infection and the cellular origin of Kaposi sarcoma remain unknown. Here we present clinical and experimental evidences that Kaposi sarcoma spindle cells may originate from virally modified oral mesenchymal stem cells (MSC). AIDS-KS spindle cells expressed neuroectodermal stem cell marker (Nestin) and oral MSC marker CD29, suggesting an oral/craniofacial MSC lineage of AIDS-associated Kaposi sarcoma. Furthermore, oral MSCs were highly susceptible to KSHV infection, and infection promoted multilineage differentiation and mesenchymal-to-endothelial transition (MEndT). KSHV infection of oral MSCs resulted in expression of a large number of cytokines, a characteristic of Kaposi sarcoma, and upregulation of Kaposi sarcoma signature and MEndT-associated genes. These results suggest that Kaposi sarcoma may originate from pluripotent MSC and KSHV infection transforms MSC to Kaposi sarcoma-like cells through MEndT.Significance: These findings indicate that Kaposi sarcomas, which arise frequently in AIDS patients, originate from neural crest-derived mesenchymal stem cells, with possible implications for improving the clnical treatment of this malignancy. Cancer Res; 78(1); 230-45. ©2017 AACR.