Through yeast two-hybrid analysis and coimmunoprecipitation studies, we have identified a novel cellular AAV-2 Rep78/Rep68 interaction partner located predominantly in the cytoplasm. In public databases, it has been assigned as KCTD5, because of a region of high similarity to the cytoplasmic tetramerization domain of voltage-gated potassium channels. Whereas Rep/KCTD5 interaction relied on the region surrounding the Rep nuclear localization signal, nuclear accumulation of Rep was not required. Wildtype Rep78/Rep68 proteins induced the translocation of large portions of KCTD5 into the nucleus pointing to functional interactions both in the cytoplasm and the nucleus. In line with an anticipated functional interference in the cytoplasm, KCTD5 overexpression completely abrogated Rep68-mediated posttranscriptional activation of a HIV-LTR driven luciferase reporter gene. Our study expands the panel of already identified nuclear Rep interaction partners to a cytoplasmic protein, which raises the awareness that important steps in the AAV life cycle may be regulated in this compartment.