The parvovirus the minute virus of mice (MVM) has a linear single-stranded DNA genome with unique palindromic sequences at both termini which enable it to fold back on itself and form hairpin or cruciform-type structures. The purpose of this study was to examine the primary events occurring during MVM replication mediated solely by the host cell replication machinery. In an in vitro DNA replication system using HeLa cell extracts, we found that there was a distinct activity that utilized the 5' terminal palindrome sequence of MVM to produce a secondary structure from a duplex extended form, in a time-dependent fashion. The secondary structure was due to the formation of a hairpin rather than a stem-plus-arms type structure and was associated with initiation of DNA synthesis, performed specifically by DNA polymerase delta. Inhibition of DNA polymerase alpha had no effect upon this activity. Removal of all but 13 base pairs of the hairpin arm abolished the synthesis of DNA, indicating that there is a minimal length requirement for the duplex region of DNA or that this region contains regulatory genetic elements. These data are consistent both with the role of DNA polymerase delta in extending the synthesis of DNA from a DNA primer and with unidirectional continuous DNA synthesis, initiating from a hairpin, as a mode of replication for MVM.