Hydatid disease is a zoonotic parasitic disease that is distributed widely around the world and causes substantial human morbidity and mortality, particularly in developing countries. Reduction of human hydatid disease using anthelmintics, together with changes in human lifestyle and animal management practices, have been unsuccessful in some developing countries where the disease still persists. Substantial progress has been made towards developing a practical, recombinant vaccine in sheep, to interrupt the lifecycle of Echinococcus granulosus and to prevent subsequent transmission from dogs to humans. This review focuses on the scientific advances in the development of a recombinant vaccine for hydatid disease and the remaining challenges facing the widespread use of the vaccine for control of hydatid disease in endemic areas.