The adeno-associated virus 2 (AAV) genome is a single-stranded DNA which contains the inverted terminal rep eats (ITRs) of 145 nucleotides. The terminal 125 nucleotides of each ITR form palindromic hairpin structures that serve as primers for AAV DNA replication. These hairpin structures also play a crucial role in the integration, as well as the rescue, of the proviral genome from latently-infected cells, or from the recombinant AAV plasmids. However, the ITRs also contain an additional domain, designated the D-sequence, a 20-nucleotide stretch that is not involved in the formation of hairpins. In order to examine the role of the D-sequence in viral DNA rescue and replication, a number of recombinant AAV plasmids were constructed which contained deletions/substitutions in different regions of the ITRs. The results presented here reveal the existence of additional sequences, other than the hairpin structures, which serve as primers for AAV DNA replication. The results also show that whereas the hairpin structures are sufficient for excision and replication of the viral DNA, the D-sequence is crucial for the high efficiency of rescue and replication of the AAV genome. © 1995 Academic Press Limited.