During the past decade, in vivo administration of viral gene transfer vectors for treatment of numerous human diseases has been brought from bench to bedside in the form of clinical trials, mostly aimed at establishing the safety of the protocol. In preclinical studies in animal models of human disease, adeno-associated viral (AAV) vectors have emerged as a favored gene transfer system for this approach. These vectors are derived from a replication-deficient, non-pathogenic parvovirus with a single-stranded DNA genome. Efficient gene transfer to numerous target cells and tissues has been described. AAV is particularly efficient in transduction of non-dividing cells, and the vector genome persists predominantly in episomal forms. Substantial correction, and in some instances complete cure, of genetic disease has been obtained in animal models of hemophilia, lysosomal storage disorders, retinal diseases, disorders of the central nervous system, and other diseases. Therapeutic expression often lasted for months to years. Treatments of genetic disorders, cancer, and other acquired diseases are summarized in this review. Vector development, results in animals, early clinical experience, as well as potential hurdles and challenges are discussed.