Virus-like vesicles (VLVs) are membrane-enclosed vesicles that resemble native enveloped viruses in organization but lack the viral capsid and genome. During the productive infection of tumor-associated gammaherpesviruses, both virions and VLVs are produced and are released into the extracellular space. However, studies of gammaherpesvirus-associated VLVs have been largely restricted by the technical difficulty of separating VLVs from mature virions. Here we report a strategy of selectively isolating VLVs by using a Kaposi's sarcoma-associated herpesvirus (KSHV) mutant that is defective in small capsid protein and is unable to produce mature virions. Using mass spectrometry analysis, we found that VLVs contained viral glycoproteins required for cellular entry, as well as tegument proteins involved in regulating lytic replication, but lacked capsid proteins. Functional analysis showed that VLVs induced the expression of the viral lytic activator RTA, initiating KSHV lytic gene expression. Furthermore, employing RNA sequencing, we performed a genomewide analysis of cellular responses triggered by VLVs and found that PRDM1, a master regulator in cell differentiation, was significantly upregulated. In the context of KSHV replication, we demonstrated that VLV-induced upregulation of PRDM1 was necessary and sufficient to reactivate KSHV by activating its RTA promoter. In sum, our study systematically examined the composition of VLVs and demonstrated their biological roles in manipulating host cell responses and facilitating KSHV lytic replication.IMPORTANCE Cells lytically infected with tumor-associated herpesviruses produce a high proportion of virus-like vesicles (VLVs). The composition and function of VLVs have not been well defined, largely due to the inability to efficiently isolate VLVs that are free of virions. Using a cell system capable of establishing latent KSHV infection and robust reactivation, we successfully isolated VLVs from a KSHV mutant defective in the small capsid protein. We quantitatively analyzed proteins and microRNAs in VLVs and characterized the roles of VLVs in manipulating host cells and facilitating viral infection. More importantly, we demonstrated that by upregulating PRDM1 expression, VLVs triggered differentiation signaling in targeted cells and facilitated viral lytic infection via activation of the RTA promoter. Our study not only demonstrates a new strategy for isolating VLVs but also shows the important roles of KSHV-associated VLVs in intercellular communication and the viral life cycle.