The safety of several gene therapy approaches for treatment of the severe, X-linked bleeding disorder hemophilia is currently being evaluated in early phase clinical trials. One strategy seeks to correct deficiency of functional coagulation factor IX (hemophilia B) by intramuscular (IM) administration of an adeno-associated viral (AAV) vector. A potentially serious complication of any treatment for hemophilia is formation of inhibitory antibodies against the coagulation factor protein, a risk that increases in the setting of null mutations in the factor IX gene (F9). Here, we describe hemophilia B mice with a large F9 deletion that form inhibitors within 1 to 2 months after IM administration of an AAV vector expressing mouse F9 or after repeated intravenous infusion of mouse F9 concentrate. In both cases, inhibitors are primarily IgG1 immunoglobulins representing a Th2-driven humoral immune response. We further demonstrate that anti-mouse F9 antibody formation in the gene-based approach can be reduced by transient immune modulation at the time of vector administration. Moreover, this maneuver resulted in complete absence of anti-mouse F9 and sustained expression of functional mouse F9 in some hemophilia B mice, particularly in those animals treated with the immunosuppressive drug cyclophosphamide. These data have direct relevance for design of clinical trials and strategies aimed at avoiding immune responses against a secreted transgene product.