Adoptive cellular therapy provides the promise of a potentially powerful general treatment for cancer. Although this is a complex and challenging field, there have been major advances in basic and translational research resulting in clinical trial activity that is now beginning to confirm this promise. However, these trials are also identifying new challenges and this review focuses on these clinical issues. For tumors such as melanoma, in which tumor-specific T cells can be readily identified and isolated, the adoptive transfer of "tumor-infiltrating lymphocytes" (TILs) already appears to offer significant patient benefit and this approach now warrants further development. Genetically engineered T cells offer a means to endow peripheral blood T cells with antitumor activity and in principle these techniques could allow the treatment of a wide range of cancers. Genetic engineering also offers the means to endow T cells with new properties and enhanced functions. There have been clear proof-of-principle trials showing responses with T cell receptor (TCR)-engineered T cells and this can be built on with further development. By contrast, other trials have produced significant toxicity related to expression of target antigen on normal tissue, particularly with enhanced receptors. The challenge ahead lies in understanding how to achieve the balance between targeted antitumor immune responses while avoiding toxicity associated with on-target destruction of antigen-expressing normal tissues. Cellular therapy of cancer will need continued preclinical evaluation as well as carefully designed clinical trials addressing the various issues. For these challenges to be fully assessed, and for progression to a widely used, effective and safe therapy, development as cooperative groups is an appropriate way forward.