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Since the isolation of adeno-associated virus (AAV) in 1965 as a defective parvovirus found in monkey cells infected with a simian adenovirus, much information has accumulated on the biology of the AAV family of small single-stranded DNA viruses in cell culture. In contrast, very little is known about the natural life cycle in humans and how AAV persists in a high proportion of individuals in a form that has not been associated with overt disease. This review focuses on the findings which suggest that the AAV replication program employs a two-tier strategy. When helper viruses such as adenovirus or herpesvirus are available for coinfection, abundant productive replication ensues. In the absence of such helper viruses, AAV is still capable of replication but at a much lower level, under conditions where viral gene expression is limited by the cellular response to DNA damaging agents and other regulators. It is suggested that it is this basal level of replication, just sufficient for survival in populations of cycling cells, that enables AAV to persist in humans as a non-cytopathic infection. Discussion on the AAV natural life cycle is particularly pertinent since gene delivery vehicles based on AAV have now emerged as clinically-relevant vectors for human gene therapy applications.