Adeno-associated virus (AAV) is a human parvovirus that normally requires a helper virus such as adenovirus (Ad) for replication. The four AAV replication proteins (Rep78, Rep68, Rep52, and Rep40) are pleiotropic effectors of virus integration, replication, transcription, and virion assembly. These proteins exert effects on Ad gene expression and replication. In transient plasmid transfection assays, Rep proteins inhibit gene expression from a variety of transcription promoters. We have examined Rep protein-mediated inhibition of transcription of the Ad major late transcription promoter (AdMLP) in vitro. Rep78/68 are the strongest transcription suppressors and the purine nucleotide binding site in the Rep proteins, and by implication, the ATPase activity or conformational change induced by nucleotide binding is required for full repression. Rep52 has modest effects, and Rep40 exerts no significant effect on transcription. Rep78/68 and their N-terminal 225-residue domain bind to a 55-bp AdMLP DNA fragment in gel shift assays, suggesting that protein-DNA interactions are required for inhibition. This interaction was confirmed in DNase I protection assays and maps to a region extending from the TATA box to the transcription initiation site. Gel shift, DNase I, and chemical cross-linking assays with TATA box-binding protein (TBP) and Rep68 indicate that both proteins interact with each other and with the promoter at adjacent sites. The demonstration of Rep interaction with TBP and the AdMLP suggests that Rep78/68 alter the preinitiation complex of RNA polymerase II transcription. These observations provide new insight into the mechanism of Rep-mediated inhibition of gene expression.