Establishment of latent infection and reactivation from latency are critical aspects of herpesvirus infection and pathogenesis. Interfering with either of these steps in the herpesvirus life cycle may offer a novel strategy for controlling herpesvirus infection and associated disease pathogenesis. Prior studies show that mice deficient in gamma interferon (IFN-γ) or the IFN-γ receptor have elevated numbers of cells reactivating from murine gammaherpesvirus 68 (γHV68) latency, produce infectious virus after the establishment of latency, and develop large-vessel vasculitis. Here, we demonstrate that IFN-γ is a powerful inhibitor of reactivation of γHV68 from latency in tissue culture. In vivo, IFN-γ controls viral gene expression during latency. Importantly, depletion of IFN-γ in latently infected mice results in an increased frequency of cells reactivating virus. This demonstrates that IFN-γ is important for immune surveillance that limits reactivation of γHV68 from latency.