The first successful gene therapy trials for the treatment of hereditary disorders underscore the potential of gene therapy to combat disease and alleviate human suffering. The development of gene therapy for hemophilia is not only a research priority in its own right but also serves as an ideal trailblazer for many different diseases. Significant progress has recently been made in the development of gene therapy for the treatment of hemophilia A and B. Long-term therapeutic levels of factor VIII and IX could be expressed following gene therapy in hemophilic mice, stably correcting the bleeding diathesis. These advances parallel the development of improved gene delivery systems. The induction of neutralizing antibodies (inhibitors) to the clotting factors could potentially preclude stable phenotypic correction. The risk of inhibitor formation varied, depending at least in part on the type of vector used and its in vivo tropism. We also demonstrated that the risk of immune responses to the vector particles, the clotting factors and/or transduced cells can be reduced by using vectors that only minimally interact with antigen presenting cells. In hemophilic mice, robust and stable clotting factor expression levels were achieved using adeno-associated viral vectors based on the newly disovered serotypes AAV8 and AAV9 which can efficient deliver the clotting factor genes into hepatocytes without triggering any inflammatory responses or adverse events. Pre-clinical studies in large animal models will be initiated to further validate these improved AAV vectors to ultimately justify a clinical trial in patients with severe hemophilia.