A key issue in gene therapy is the immune response to the therapeutic transgene. This is especially important in applications where current treatments often elicit an antibody response, like hemophilia, where protein replacement therapy results in neutralizing antibodies (“inhibitors”) in ~25% of severe hemophilia A and 1-3% of severe hemophilia B patients. To test the ability of skeletal muscle-directed gene therapy to prevent an immune response, we used an inhibitor-prone dog model of severe hemophilia B to express a hyperactive factor IX (FIX) variant from skeletal muscle via adeno-associated viral (AAV) vector and observed curative levels of expression that lasted for >3 years (ongoing observation). There was no evidence of an immune response even after immunological challenge with recombinant FIX protein that would normally provoke high-titer inhibitors in this model. In dogs that had been previously administered vector, we observed stable expression for >8 years, and immune tolerance was maintained upon FIX challenge. Next, we investigated the ability of liver-directed gene therapy to reverse pre-existing inhibitor responses using three novel dog models of severe hemophilia A. We expressed canine factor VIII variants with increased secretion and activity relative to wild-type from the livers of four dogs by AAV vectors. All dogs had baseline high-titer inhibitors and would have a poor prognosis with current clinical protocols. One dog died during a spontaneous bleeding event after his inhibitor titer declined by >90%, but the other dogs completely eradicated their inhibitors and expressed therapeutic levels of factor VIII at the last sample. Unlike protein replacement therapy, gene therapy results in stable, constitutive levels of factor. This constant expression appears crucial to inducing immune tolerance to protein replacement therapy or reversing pre-existing immune responses. Even in the most challenging hemophilia models of immune tolerance induction, expression from the vector was able to prevent an antibody response and induce tolerance to protein replacement therapy or completely eradicate pre-existing inhibitors in three of four dogs (one reduced inhibitor titer by >90%). These results support the use of gene therapy to both induce immune tolerance in high-risk patient populations and provide therapeutic benefit after tolerance is achieved.