Recombinant adeno-associated virus (AAV) is the leading vector for gene therapy in the retina. As non-pathogenic, non-integrating, replication deficient vector, the recombinant virus efficiently transduces all key retinal cell populations. Successful testing of AAV vectors in clinical trials of inherited retinal diseases led to the recent approval of voretigene neparvovec (Luxturna) for the treatment of RPE65 mutation-associated retinal dystrophies. However, studies applying AAV-mediated retinal gene therapy independently reported intraocular inflammation and/or loss of efficacy after initial functional improvements. Both observations might be explained by targeted removal of transduced cells via anti-viral defence mechanisms. AAV has been shown to activate innate pattern recognition receptors (PRRs) such as toll-like receptor (TLR)-2 and TLR-9 resulting in the release of inflammatory cytokines and type I interferons. The vector can also induce capsid-specific and transgene-specific T cell responses and neutralizing anti-AAV antibodies which both limit the therapeutic effect. However, the target organ of retinal gene therapy, the eye, is known as an immune-privileged site. It is characterized by suppression of inflammation and promotion of immune tolerance which might prevent AAV-induced immune responses. This review evaluates AAV-related immune responses, toxicity and inflammation in studies of retinal gene therapy, identifies influencing variables of these responses and discusses potential strategies to modulate immune reactions to AAV vectors to increase the safety and efficacy of ocular gene therapy.