Recombinant adeno-associated virus (rAAV) is capable of directing long-term, high-level transgene expression without destructive cell-mediated immune responses. However, traditional packaging methods for rAAV vectors are generally inefficient and contaminated with replication-competent AAV (rcAAV) particles. Although wild-type AAV is not associated with any known human diseases, contaminating rcAAV particles may affect rAAV gene expression and are an uncontrolled variable in many AAV gene transfer studies. In the current study, a novel strategy was designed to both optimize AAV rep gene expression and increase vector yield, as well as simultaneously to diminish the potential of generating rcAAV particles from the helper plasmid. The strategy is based on the insertion of an additional intron in the AAV genome. In the AAV infectious clone, the intron insertion had no effects on the properties of Rep proteins expressed. Normal levels of both Rep and Cap proteins were expressed, and the replication of the AAV genome was not impaired. However, the generation of infectious rcAAV particles using intronized AAV helper was greatly diminished, which was due to the oversized AAV genome caused by the insertion of the artificial introns. Moreover, the rAAV packaging was significantly improved with the appropriate choice of intron and insertion position. The intron is another element that can regulate the rep and cap gene expression from the helper plasmid. This study provides for a novel AAV packaging system which is highly versatile and efficient. It can not only be combined with other AAV packaging systems, including rep-containing cell lines and herpes simplex virus hybrid packaging methods, but also be used in other vector systems as well.