Kaposi's sarcoma (KS) is an AIDS-defining cancer with aberrant neovascularization caused by KS-associated herpesvirus (KSHV). Although the interaction between HIV-1 and KSHV plays a pivotal role in promoting the aggressive manifestations of KS, the pathogenesis underlying AIDS-KS remains largely unknown. Here we examined HIV-1 Nef protein promotion of KSHV oncoprotein K1-induced angiogenesis. We showed that both internalized and ectopic expression of Nef in endothelial cells synergized with K1 to facilitate vascular tube formation and cell proliferation, and enhance angiogenesis in a chicken CAM model. In vivo experiments further indicated that Nef accelerated K1-induced angiogenesis and tumorigenesis in athymic nu/nu mice. Mechanistic studies revealed that Nef and K1 synergistically activated PI3K/AKT/mTOR signaling by downregulating PTEN. Furthermore, Nef and K1 induced cellular miR-718, which inhibited PTEN expression by directly targeting a seed sequence in the 3′ UTR of its mRNA. Inhibition of miR-718 expression increased PTEN synthesis and suppressed the synergistic effect of Nef- and K1-induced angiogenesis and tumorigenesis. These results indicate that, by targeting PTEN, miR-718 mediates Nef- and K1-induced angiogenesis via activation of AKT/mTOR signaling. Our results demonstrate an essential role of miR-718/AKT/mTOR axis in AIDS-KS and thus may represent an attractive therapeutic target.