Recombinant adeno-associated virus 2 (AAV) vectors encapsidate single-stranded genomes of either polarity equally frequently in separate mature virions. Because viral genomes of either polarity are transcriptionally inactive, both the failure to undergo viral second-strand DNA synthesis and the failure to undergo DNA strand annealing have been proposed as possible reasons to account for the observed low efficiency of transgene expression. We compared the transduction efficiencies of conventional AAV vectors containing both [-] and [+] polarity genomes with those containing either the [-] or the [+] polarity genomes, in vitro as well as in vivo. We document that the transduction efficiency of single-polarity AAV vectors is significantly enhanced by (i) co-infection with adenovirus; (ii) small interfering RNA (siRNA)-mediated down-modulation of a cellular protein, FKBP52, tyrosine-phosphorylated forms of which inhibit AAV second-strand DNA synthesis; (iii) over-expression of a cellular protein tyrosine phosphatase, T cell protein tyrosine phosphatase (TC-PTP), which catalyzes tyrosine-dephosphorylation of FKBP52; and (iv) deliberate over-expression of TC-PTP, or the absence of FKBP52, respectively, in TC-PTP-transgenic mice and in FKBP52-knockout mice. These data confirm that viral second-strand DNA synthesis, rather than DNA strand annealing, is the rate-limiting step in efficient transduction by AAV vectors. This finding has implications in the use of these vectors in human gene therapy.