Vaccines represent one of the most successful chapters in the history of medicine. Over the past decades, the advent of recombinant cDNA technology has enabled the biomedical community to genetically engineer viruses for vaccine delivery purposes. As a starting point, this review evaluates the unmet medical needs, which drive scientists and industry to exploit such fundamentally new technology for human vaccination. The author discusses the molecular functioning, production and safety profile of replication-competent and -deficient viral vector systems, representing two fundamentally distinct classes of "genetic vaccines". Building upon this knowledge, he dissects the immunological mechanisms rendering immune responses to viral vectors qualitatively and quantitatively distinct from those elicited by non-live vaccination approaches. These mechanisms comprise (1) the vectors' innate immune recognition by the host cell, (2) potent priming of CD8+ cytotoxic T cells as a result of dendritic cell targeting and endogenous protein synthesis, (3) conformational antigen display for protective antibody induction as well as (4) prolonged availability of substantial quantities of antigen. Deduced from these features, preferential indications for virally vectored vaccines are discussed, taking into consideration specific medical needs as well as risk-benefit assessments of replicating vector systems. The limitations and challenges in virally vectored vaccination must also be given careful consideration. Pre-existing and vaccination-induced anti-vector immunity can interfere with vaccine immunogenicity and prime-boost vaccination, respectively. Additionally, the requirement for eukaryotic production systems imposes technological as well as regulatory hurdles. Existing strategies to overcome these challenges are outlined. With the recent licensure of the first virally vectored vaccine this review seems timely to herald the introduction of virally vectored vaccines into daily medical practice.