Direct or inverse repeated sequences are important functional features of prokaryotic and eukaryotic genomes. Considering the unique mechanism, involving single-stranded genomic intermediates, by which adenovirus (Ad) replicates its genome, we investigated whether repetitive homologous sequences inserted into El-deleted adenoviral vectors would affect replication of viral DNA, In these studies we found that inverted repeats (IRs) inserted into the El region could mediate predictable genomic rearrangements, resulting in vector genomes devoid of all viral genes. These genomes (termed Delta Ad.IR) contained only the transgene cassette flanked on both sides by precisely duplicated IRs, Ad packaging signals, and Ad inverted terminal repeat sequences, Generation of Delta Ad.IR genomes could also be achieved by coinfecting two viruses, each providing one inverse homology element. The formation of Delta Ad.IR genomes required Ad DNA replication and appeared to involve recombination between the homologous inverted sequences. The formation of Delta Ad.IR genomes did not depend on the sequence within or adjacent to the inverted repeat elements. The small Delta Ad.IR vector genomes were efficiently packaged into functional Ad particles. All functions for Delta Ad.IR replication and packaging were provided by the full-length genome amplified in the same cell. Delta Ad.IR vectors were produced at a yield of similar to 10(4) particles per cell, which could be separated from virions with full-length genomes based on their lighter buoyant density. Delta Ad.IR vectors infected cultured cells with the same efficiency as first-generation vectors; however, transgene expression was only transient due to the instability of deleted genomes within transduced cells. The finding that IRs present within Ad vector genomes can mediate precise genetic rearrangements has important implications for the development of new vectors for gene therapy approaches.