Epstein-Barr nuclear antigen 1 (EBNA-1) is the only viral protein required to support replication of Epstein-Barr virus during the latent phase of its life cycle. The DNA segment required for latent replication, oriP, contains two essential binding regions for EBNA-1, termed FR and DS, that are separated by 1 kilobase pair. The FR site appears to function as a replicational enhancer providing for the start of replication at the DS site. We have used electron microscopy to visualize the interaction of EBNA-1 with its binding sites and to study the mechanism for communication between the FR and DS sites. We have found that DNA-bound EBNA-1 forms a DNA loop between the FR and DS sites. From these results, we suggest that EBNA-1 bound to the replicational enhancer acts by a DNA-looping mechanism to facilitate the initiation of DNA replication. Occupancy of the DS site alone is highly sensitive to competition with nonspecific DNA. In contrast, occupancy of the DS site by looping from FR is largely resistant to the competitor DNA. These experiments support the concept that enhancers act in cis from nearby sites to provide a high local concentration of regulatory proteins at their target sites and to stabilize regulatory interactions.