Scalable and efficient production of high-quality recombinant adeno-associated virus (rAAV) for gene therapy remains a challenge despite recent clinical successes. We developed a new strategy for scalable and efficient rAAV production by sequestering the AAV helper genes and the rAAV vector DNA in two different subcellular compartments, made possible by using cytoplasmic vaccinia virus as a carrier for the AAV helper genes. For the first time, the contamination of replication-competent AAV particles (rcAAV) can be completely eliminated in theory by avoiding ubiquitous nonhomologous recombination. Vector DNA can be integrated into the host genomes or delivered by a nuclear targeting vector such as adenovirus. In suspension HeLa cells, the achieved vector yield per cell is similar to that from traditional triple-plasmid transfection method. The rcAAV contamination was undetectable at the limit of our assay. Furthermore, this new concept can be used not only for production of rAAV, but also for other DNA vectors.