Gene therapy is a promising new therapeutic strategy that has been explored in a wide variety of diseases, ranging from cancer to hemophilia, and ocular disorders to autoimmune diseases, among others. Proof of concept of gene transfer approaches has been shown in over 100 studies of animal models of disease, although only a few are under development for clinical application. The US Food and Drug Administration and the European Medicines Agency have not approved any viral human gene therapy products for sale so far, but the amount of gene-related research and development occurring in the United States and Europe continues to grow at a fast rate. This review summarizes the current status of developments in the field of viral gene therapy using adeno-associated virus as a vector, with a special focus on arthritis. For rheumatoid arthritis, and to a lesser extent for other immune-related inflammatory disorders, several cell and gene transfer approaches have been investigated at the preclinical level and a few have been implemented in clinical trials. Finally, both the potential and the hurdles that are faced during development of a viral gene therapy through to its clinical application are discussed.