The microRNA (miRNA) and RNA interference (RNAi) pathways have recently emerged as an important aspect of virus-host cell interaction. This interaction can occur in several different ways and may favor either the virus or the host cell. Plants and invertebrates use RNAi as a first line of defense against virus infection by cleaving long, double-stranded viral transcripts into small interfering RNAs. However, it remains to be determined whether mammalian cells also initiate a similar response to infection. Here we present evidence that mammalian cells in fact do not induce an antiviral RNAi defense in response to infection by primate retroviruses. Viruses may also interact with host cells by encoding miRNAs to regulate either cellular or viral gene expression. Here we demonstrate that herpes simplex virus type 1 (HSV-1) encodes at least five miRNAs which are primarily expressed during latency. Two of these miRNAs modulate expression of viral genes required for productive replication. We hypothesize that down regulation of these viral genes by these latency associated miRNAs allows HSV-1 to establish and maintain the latent state.