Adeno-associated virus (AAV), a single-stranded DNA parvovirus, is emerging as one of the leading gene therapy vectors owing to its nonpathogenicity and low immunogenicity, stability and the potential to integrate site-specifically without known side-effects. A portfolio of recombinant AAV vector types has been developed with the aim of optimizing efficiency, specificity and thereby also the safety of in vitro and in vivo gene transfer. More and more information is now becoming available about the mechanism of AAV/host cell interaction improving the efficacy of recombinant AAV vector (rAAV) mediated gene delivery. This review summarizes the current knowledge of the infectious biology of AAV, provides an overview of the latest developments in the field of AAV vector technology and discusses remaining challenges.