The AAV genome is single-stranded, but each end (known as the Inverted Terminal Repeat, or ITR) has palindromic sequences that allow the formation of a three-way DNA junction with two short (9 bp) hairpin arms. We determined that Rep binds specifically to one of these hairpins, and the structure of the complex is shown here.
At the tip of the hairpin, three consecutive bases, T7-T9, interact directly with Rep. T7 is flipped out, while T8 and T9 are in conformations that allow continued helical stacking of the hairpin stem into the loop. The flipped-out base is inserted into a pre-formed surface pocket of Rep, where all of the potential hydrogen bond donors and acceptors in T7 are used.
Why does Rep bind to this part of the viral ITR? We suspect that when Rep is anchored to two parts of the viral DNA - this hairpin and the RBS - this causes a conformational change or a distortion of the DNA. Perhaps this is needed for the other part of Rep, a hexameric helicase domain, to assemble.