The inverted terminal repetition in adeno-associated virus type 2 DNA has been sequenced. The terminal repetition contain 145 nucleotides of which the first 125 nucleotides can self-base pair to form a T-shaped hairpin structure. Both restriction endonuclease analysis with SmaI and BglI and direct sequence analysis of the SmaI fragments provide evidence for two sequences in the region of the terminal repetition between nucleotides 44 and 81. The two sequences represent an inversion of the first 125 nucleotides of the terminal repetition. Based on these data a model for adeno-associated virus DNA replication is presented which agrees in detail with a general model for eucaryotic DNA replication originally proposed by Cavalier-Smith (T. Cavalier-Smith, Nature [London] 18:672--684, 1976).
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