Oral tolerance is defined as the specific suppression of humoral and/or cellular immune responses to an antigen by administration of the same antigen through the oral route. Due to its absence of toxicity, easy administration, and antigen specificity, oral tolerance is a very attractive approach to prevent unwanted immune responses that cause a variety of diseases or that complicate treatment of a disease. Many researchers have induced oral tolerance to efficiently treat autoimmune and inflammatory diseases in different animal models. However, clinical trials yielded limited success. Thus, understanding the mechanisms of oral tolerance induction to therapeutic proteins is critical for paving the way for clinical development of oral tolerance protocols. This review will summarize progress on understanding the major underlying tolerance mechanisms and contributors, including antigen presenting cells, regulatory T cells, cytokines, and signaling pathways. Potential applications, examples for therapeutic proteins and disease targets, and recent developments in delivery methods are discussed.