The single-stranded, circular DNA genomes of geminiviruses contain iterated motifs of 5-6 nucleotides, known as iterons, upstream of the replication protein (Rep) coding region. Iterons were previously found to interact with cognate Rep in a sequence-specific manner, and the iteron-Rep interaction was needed for viral DNA replication. Nonetheless, iterons of closely related viruses often have different sequences, suggesting diversifying selection. To identify selection pressures driving iteron diversification, we constructed tomato yellow leaf curl virus (TYLCV, isolate SH2) mutants in which the iteron motifs were replaced with those of closely related tobacco curly shoot virus (TbCSV, isolate Y35). All mutants replicated in inoculated leaves of Nicotiana benthamiana, but many failed to spread systemically. However, the systemic movement defects were mostly rescued by de novo mutations. Intriguingly, these de novo mutations did not restore the iterons to SH2 sequences. Rather, they likely enabled viral escape from repression exerted by the heterogenous Y35 iterons absent of a matching Rep. These results are consistent with iterons acting as sites of competitive binding by host-encoded transcription factors (TFs) and the cognate Rep. The iteron-TF binding commences as soon as viral genomes enter cell nuclei, committing genome copies to Rep mRNA transcription and protein translation; but also blocking them from replication. Conversely, iteron-Rep binding is possible only after Rep is produced, and likely repels TFs from some genome copies, permitting replication initiation. Testing this model through future research should clarify the intricate evolutionary interplays between geminiviruses and their crop hosts, and inform novel management strategies.