Gene therapy holds promise for patients with inherited monogenic disorders, cancer, and rare genetic diseases. Naturally occurring adeno-associated virus (AAV) offers a well-suited vehicle for clinical gene transfer due to its lack of significant clinical pathogenicity and amenability to be engineered to deliver therapeutic transgenes in a variety of cell types for long-term sustained expression. AAV has been bioengineered to produce recombinant AAV (rAAV) vectors for many gene therapies that are approved or in late-stage development. However, ongoing challenges hamper wider use of rAAV vector-mediated therapies. These include immunity against rAAV vectors, limited transgene packaging capacity, sub-optimal tissue transduction, potential risks of insertional mutagenesis and vector shedding. This review focuses on aspects of immunity against rAAV, mediated by anti-AAV neutralizing antibodies (NAbs) arising after natural exposure to AAVs or after rAAV vector administration. We provide an in-depth analysis of factors determining AAV seroprevalence and examine clinical approaches to managing anti-AAV NAbs pre- and post-vector administration. Methodologies used to quantify anti-AAV NAb levels and strategies to overcome pre-existing AAV immunity are also discussed. The broad adoption of rAAV vector-mediated gene therapies will require wider clinical appreciation of their current limitations and further research to mitigate their impact.