Like all herpesviruses, Kaposi's sarcoma-associated herpesvirus (KSHV) can produce either latent or lytic infection. The latent v-FLIP gene is a strong activator of NFκB, and in primary effusion lymphoma (PEL) cells, blockade of NFκB activation is associated with enhanced lytic gene expression, while overexpression of p65 impairs expression of reporter genes driven by lytic promoters. This has led to the suggestion that NFκB activation may promote latency by suppressing lytic reactivation. Here we examine in detail the effects of NFκB activation on KSHV replication in several cell types. In accord with earlier work, we find that inhibition of NFκB signaling in PEL cells is associated with enhanced lytic reactivation of KSHV. Similarly, in de novo KSHV infection of primary endothelial cells, inhibition of NFκB signaling leads to an increase in lytic gene expression and enhanced virion production. By contrast, KSHV-infected human foreskin fibroblasts (HFF) show no increase in spontaneous lytic reactivation when NFκB is inhibited. Moreover, if NFκB activation is always inhibitory to lytic gene expression, one might expect its activation to be suppressed during the lytic cycle. However, we find that NFκB signaling is strongly and consistently activated in lytically infected cells of all lineages. Together these data indicate that (i) the relationship of NFκB activation to latency and lytic reactivation is not uniform, but is dependent on the cellular context; and (ii) even though NFκB activation is inhibitory to lytic gene expression in some contexts, such inhibition is at least partially bypassed or overridden during lytic growth.