Adenoassociated virus (AAV) has been developed as a vector for gene transfer because of its advantageous features: it is nonpathogenic, naturally replication-defective; it infects growth-arrested cells, and can transfer the therapeutic gene without co-delivery of any viral genes. However, a major obstacle in conducting systematic studies of AAV-mediated gene transfer in animal models is the difficulty of obtaining large quantities of recombinant virus. Recent development of AAV packaging cell lines has simplified the procedure of producing recombinant AAV (rAAV). However, the efficacy of producing large quantities of rAAV with these cell lines is yet to be demonstrated. In this study we have analyzed the difference between the replication of wild-type AAV and the production of rAAV. Using a combined single-plasmid system that carries both an AAV vector and the rep-cap genes, we have demonstrated that the AAV vector replicates to high number of copies whereas the rep-cap sequences remain unamplified in the virus-producing cells, When the copy number of rep-cap genes was increased by varying the vector/rep-cap ratio in the transfection mixture, the titer of rAAV increased proportionally. Thus, the titer of rAAV is limited by the low copy number of the rep-cap genes that results in an insufficient expression of the Rep and Cap proteins. We have also shown that generation of double-stranded replicating form of the vector DNA is accompanied by an amplified transgene expression. We propose that the increased gene expression from the accumulating double-stranded viral DNA is likely to be the mechanism by which wild-type AAV produces a large number of particles necessary to package the self-replicating AAV genomes. We conclude that mimicking this amplified expression of rep-cap genes may provide the key to produce high titers of rAAV.