Merkel cell carcinoma (MCC) is a highly aggressive nonmelanoma skin cancer arising from epidermal mechanoreceptor Merkel cells. In 2008, a novel human polyomavirus, Merkel cell polyomavirus (MCPyV), was identified and is strongly implicated in MCC pathogenesis. Currently, little is known regarding the virus-host cell interactions which support virus replication and virus-induced mechanisms in cellular transformation and metastasis. Here we identify a new function of MCPyV small T antigen (ST) as an inhibitor of NF-κB-mediated transcription. This effect is due to an interaction between MCPyV ST and the NF-κB essential modulator (NEMO) adaptor protein. MCPyV ST expression inhibits IκB kinase α (IKKα)/IKKβ-mediated IκB phosphorylation, which limits translocation of the NF-κB heterodimer to the nucleus. Regulation of this process involves a previously undescribed interaction between MCPyV ST and the cellular phosphatase subunits, protein phosphatase 4C (PP4C) and/or protein phosphatase 2A (PP2A) Aβ, but not PP2A Aα. Together, these results highlight a novel function of MCPyV ST to subvert the innate immune response, allowing establishment of early or persistent infection within the host cell.