Kaposi sarcoma-associated herpesvirus (KSHV) latency-associated nuclear antigen-1 (LANA1) is essential for the maintenance and segregation of viral episomes in KSHV latently infected B cells. We report development of intracellular, rabbit-derived antibodies generated by phage display technology, which bind to N-terminal LANA1 epitopes and neutralize the chromosome-binding activity of LANA1. Although these cloned single-chain variable fragments (scFvs) show relatively low binding affinities for the LANA1 viral antigen in in vitro assays, they nonetheless outcompete KSHV-seropositive human sera for LANA1 epitope binding. In heterologous cells, intracellular intrabody expression inhibits LANA1-dependent plasmid maintenance of both an artificial plasmid containing KSHV LANA1 binding sequences and a bacterial artificial chromosome containing the entire KSHV genome. In KSHV naturally infected primary effusion lymphoma cells, intracellular intrabody expression causes a reduction or loss of the typical LANA1 punctate, nuclear pattern. This morphologically apparent LANA1 dispersion correlates to loss of viral episome by molecular analysis. These data suggest a novel approach to antiherpes viral therapy and confirm LANA1 is critical target for neutralization of KSHV viral latency.