One major complication facing organ transplant recipients is the requirement for life-long systemic immunosuppression to prevent rejection, which is associated with an increased incidence of malignancy and susceptibility to opportunistic infections. Gene therapy has the potential to eliminate problems associated with immunosuppression by allowing the production of immunomodulatory proteins in the donor grafts resulting in local rather than systemic immunosuppression. Alternatively, gene therapy approaches could eliminate the requirement for general immunosuppression by allowing the induction of donor-specific tolerance. Gene therapy interventions may also be able to prevent graft damage owing to nonimmune-mediated graft loss or injury and prevent chronic rejection. This review will focus on recent progress in preventing transplant rejection by gene therapy.