The discovery of naturally occurring adeno-associated virus (AAV) isolates in different animal species and the generation of engineered AAV strains using molecular genetics tools have yielded a versatile AAV vector toolkit. Promising results in preclinical animal models of human disease spurred the much awaited transition toward clinical application, and early successes in phase I/II clinical trials for a broad spectrum of genetic diseases have recently been reported. As the gene therapy community forges ahead with cautious optimism, both preclinical and clinical studies using first generation AAV vectors have highlighted potential challenges. These include cross-species variation in vector tissue tropism and gene transfer efficiency, pre-existing humoral immunity to AAV capsids and vector dose-dependent toxicity in patients. A battery of second generation AAV vectors, engineered through rational and combinatorial approaches to address the aforementioned concerns, are now available. This review will provide an overview of preclinical studies with the ever-expanding AAV vector portfolio in large animal models and an update on new lead AAV vector candidates poised for clinical translation.