Gene transfer into the brain allows the manipulation of transgene expression in both time and space. Recently developed gene transfer technologies allow transgenes to be expressed in any anatomically, biochemically or functionally distinct group of brain cells. Gene transfer has been used to alter the expression of neurotransmitter receptors, ion channels, signaling proteins, neuronal growth, differentiation and survival factors, and thus to modify brain anatomy, neuron physiology, behavior and pathology. However, challenges remain in making gene therapy a more widespread tool for the treatment of neurological disease. We have identified the following as areas needing development: access and delivery of viral vectors to the brain; diffusion of viral vectors and transgenes throughout large areas of brain tissue; viral vector side effects and toxicity, inflammatory and immune responses to vectors; long-term stable transgene expression; cell type-specific expression of transgenes; and the ability of the experimenter or physician to switch transgene expression 'on' and 'off' at will. In the last year, neuro-gene therapy has shown that brain defects in experimental disease models can be prevented and corrected, and that viral vectors and encoded transgenes can be made to diffuse over larger brain areas. In addition, the cause of vector-induced inflammation and immune responses have begun to be elucidated, so that rational approaches can be developed to avoid these complications. Further improvements in viral vectors will facilitate clinical trials in the near future.