Adeno-associated virus type 2 (AAV) is known to inhibit virally mediated oncogenic transformation. One of the early events of adenovirus (Ad) infection is the functional inactivation of cell cycle regulatory retinoblastoma (RB) family of proteins, which consists of retinoblastoma protein (pRB), p107, and p130. In an effort to understand the molecular basis of anti-oncogenic properties of AAV, we studied the effects of AAV expression on these proteins in cells infected with Ad. Western blot analysis showed that AAV interferes with the adenoviral-induced degradation and hyperphosphorylation of the pRB family of proteins in normal human fibroblasts as well as in HeLa and 293 cell lines. RNase protection assay showed enhanced expression of pocket protein gene by AAV expression. We also demonstrate that Rep proteins, the major AAV regulatory proteins, bind to E1A, the immediate early gene of Ad responsible for hyperphosphorylation and dissociation of pRB-E2F complex. This binding of AAV Rep proteins to E1A leads to decreased association between E1A and pRB leading to protection of pocket proteins from degradation, decreased expression of S phase genes and inhibition of cell cycle progression. These results suggest that the antiproliferative activity of AAV against Ad is mediated, at least in part, by effects of AAV Rep proteins on the Rb family of proteins.