Endoplasmic reticulum (ER) stress-activated unfolded protein response (UPR) plays multiple roles in cancer development, but its specific roles for virus-associated cancers have not been fully understood. It is still unknown whether ER stress/UPR occurs in and contributes to nasopharyngeal carcinoma (NPC), an epithelial malignancy closely associated with EBV. Here, we report that UPR proteins are frequently detected in NPC biopsies. In addition, we reveal that, in EBV-infected NPC cells, ER stress inducers up-regulate a potent EBV oncoprotein latent membrane protein 1 (LMP1), and the ER stress-induced LMP1 enhances production of interleukin-8. ER stress triggers LMP1 expression at a transcriptional level, activating a distal LMP1 promoter TR-L1. TR-L1 contains an ER stress-responsive element, which is targeted by an UPR protein XBP-1. Ectopic expression of XBP-1 induces LMP1 expression, and knockdown of XBP-1 blocks ER stress-triggered up-regulation of LMP1 in NPC cells. Furthermore, XBP-1 significantly correlates with LMP1 expression in NPC tumor biopsies. Therefore, this study not only provides a novel clue linking ER stress/UPR to EBV-associated NPC but also suggests that ER stress/UPR can promote virus-associated cancer in a unique way by driving expression of a viral oncogene.