The association of Epstein-Barr virus (EBV) infection with the development of nasopharyngeal carcinoma (NPC) is well established. Latent membrane protein 1 (LMP1), the major oncogene encoded by EBV, is believed to play a crucial role in NPC pathogenesis by virtue of its ability to constitutively activate multiple cell signalling pathways. The LKB1-AMPK pathway is a master regulator of cellular metabolism that, via modulation of energy metabolism, has tumour suppressor activity. In this study we identify a novel ability of LMP1 to inhibit the LKB1-AMPK pathway through phosphorylation of LKB1 at serine 428 with subsequent suppression of the phosphorylation of AMPK and its substrates, ACC and Raptor. We show that MEK/ERK-MAPK signalling, activated by the CTAR1 domain of LMP1, is responsible for LKB1-AMPK inactivation. In addition, reactivation of AMPK signalling by AMPK activator, AICAR, abolished LMP1-induced cellular transformation (proliferation and anchorage-independent growth) in nasopharyngeal epithelial cells. Immunohistochemical staining revealed that a low level of phosphorylated AMPK is common in primary NPC specimens, and that this correlated significantly with the expression of LMP1. AICAR treatment inhibited the proliferation and anchorage-independent growth of NPC cells as well as potentiating the cytotoxic effect of the chemotherapeutic drug 5-fluorouracil. The current findings demonstrate that LMP1-mediated AMPK inactivation contributes to the proliferation and transformation of epithelial cells, thereby implicating the LKB1-AMPK pathway in the EBV-driven pathogenesis of NPC. Our findings also suggest that AMPK activators could be used to enhance the efficacy of conventional chemotherapeutic agents in the treatment of local and metastatic NPC.