Inhibitory antibodies to factor VIII (FVIII) are a major complication in the treatment of hemophilia A, affecting approximately 20% to 30% of patients. Current treatment for inhibitors is based on long-term, daily injections of large amounts of FVIII protein. Liver-directed gene therapy has been used to induce antigen-specific tolerance, but there are no data in hemophilic animals with pre-existing inhibitors. To determine whether sustained endogenous expression of FVIII could eradicate inhibitors, we injected adeno-associated viral vectors encoding canine FVIII (cFVIII) in 2 strains of inhibitor hemophilia A dogs. In 3 dogs, a transient increase in inhibitor titers (up to 7 Bethesda Units [BU]) at 2 weeks was followed by continuous decline to complete disappearance within 4-5 weeks. Subsequently, an increase in cFVIII levels (1.5%-8%), a shortening of clotting times, and a reduction (> 90%) of bleeding episodes were observed. Immune tolerance was confirmed by lack of antibody formation after repeated challenges with cFVIII protein and normal protein half-life. A fourth dog exhibited a strong early anamnestic response (216 BU), with slow decline to 0.8 BU and cFVIII antigen detection by 18 months after vector delivery. These data suggest that liver gene therapy has the potential to eradicate inhibitors and could improve the outcomes of hemophilia A patients.