Adeno-associated viruses (AAV) are Dependoparvoviruses that have shown promise as recombinant vectors for gene therapy. While infectious pathways of AAV are well studied, gaps remain in our understanding of host factors affecting vector genome expression. Here, we map the role of ring finger protein 121 (RNF121), an E3 ubiquitin ligase, as a key regulator of AAV genome transcription. CRISPR-mediated knockout of RNF121 (RNF121 KO) in different cells markedly decreased AAV transduction regardless of capsid serotype or vector dose. Recombinant AAV transduction is partially rescued by overexpressing RNF121, but not by co-infection with helper Adenovirus. Major steps in the AAV infectious pathway including cell surface binding, cellular uptake, nuclear entry, capsid uncoating and second strand synthesis are unaffected. While gene expression from transfected plasmids or AAV genomes is unaffected, mRNA synthesis from AAV capsid-associated genomes is markedly decreased in RNF121 KO cells. These observations were attributed to transcriptional arrest as corroborated by RNAPol-ChIP and mRNA half-life measurements. Although AAV capsid proteins do not appear to be direct substrates of RNF121, the catalytic domain of the E3 ligase appears essential. Inhibition of ubiquitin-proteasome pathways revealed that blocking Valosin Containing Protein (VCP/p97), which targets substrates to the proteasome, can selectively and completely restore AAV-mediated transgene expression in RNF121 KO cells. Expanding on this finding, transcriptomic and proteomic analysis revealed that the catalytic subunit of DNA PK (DNAPK-Cs), a known activator of VCP, is upregulated in RNF121 KO cells and that the DNA damage machinery is enriched at sites of stalled AAV genome transcription. We postulate that a network of RNF121, VCP and DNA damage response elements function together to regulate transcriptional silencing and/or activation of AAV vector genomes