Hemophilia is a bleeding disorder caused by mutations in the genes encoding coagulation Factor VIII (FVIII) or FIX. Current treatment is through intravenous infusion of the missing protein. The major complication of treatment is the development of neutralizing Ab’s to the clotting factor. Infusion of recombinant activated human Factor VII (rhFVIIa), driving procoagulant reactions independently of human FVIII (hFVIII) or hFIX, has been successful in such patients and could in theory provide hemostasis in all hemophilia patients. However, its high cost and short half-life have limited its use. Here, we report a novel treatment strategy with a recombinant adeno-associated virus vector delivering a modified FVII transgene that can be intracellularly processed and secreted as activated FVII (FVIIa). We show long-term expression, as well as phenotypic correction of hemophilia B mice following gene transfer of the murine FVIIa homolog, with no evidence of thrombotic complications at these doses. These data hold promise for a potential treatment for hemophilia and other bleeding disorders.