Gene replacement therapy is an attractive approach for treatment of genetic disease, but may be complicated by the risk of a neutralizing immune response to the therapeutic gene product. There are examples of humoral and cellular immune responses against the transgene product as well as absence of such responses, depending on vector design and the underlying mutation in the dysfunctional gene. It has been unclear, however, whether transgene expression can induce tolerance to the therapeutic antigen. Here, we demonstrate induction of immune tolerance to a secreted human coagulation factor IX (hF.IX) antigen by adeno-associated viral gene transfer to the liver. Tolerized mice showed absence of anti-hF.IX and substantially reduced in vitro T cell responses after immunization with hF.IX in adjuvant. Tolerance induction was antigen specific, affected a broad range of Th cell subsets, and was favored by higher levels of transgene expression as determined by promoter strength, vector dose, and mouse strain. Hepatocyte-derived hF.IX expression induced regulatory CD4(+) T cells that can suppress anti-hF.IX formation after adoptive transfer. With a strain-dependent rate of success, tolerance to murine F.IX was induced in mice with a large F.IX gene deletion, supporting the relevance of these data for treatment of hemophilia B and other genetic diseases.