The most serious current complication of factor replacement therapy for hemophilia patients is the development of neutralizing antibodies to the factor termed inhibitors. Patients with high-titer inhibitors frequently develop serious bleeding complications which do not respond to standard factor replacement therapy. Therefore, they must be treated with the so-called bypassing agents, recombinant factor VIIa and activated prothrombin complex concentrates, neither of which is as effective as standard factor replacement in patients without inhibitors. Immune tolerance therapy aimed at eradicating inhibitors is successful in a majority of patients; however, a sizable minority will have life-long inhibitors and often develop debilitating joint disease. The ultimate goal is to develop strategies aimed at preventing inhibitor development though these have not been realized yet. Until this is achieved, additional novel approaches are needed to improve the treatment of bleeding episodes and to better treat arthropathy once it develops. Finally, there is no laboratory monitoring device which can predict the clinical response of patients to bypassing agents. Thus another goal of current research is to develop such a tool which will enable the individualization of bypassing agent.