Potential applications and impact of the adeno-associated virus (AAV) as a gene transfer vector have expanded rapidly in the last decade. Recent advances in the production of high-titer purified rAAV vector stocks have made the transition to human clinical trials a reality in the last moments of the millenium. Production improvements will be complemented in the coming years with understanding of and innovations in the targeting and packaging of rAAV, the design of transgene cassettes, and the host immune response to the vectors. These expected areas of progress are discussed, with special attention to clinical applications for which rAAV vectors may help close the gap towards successful gene therapy.