Genetic tools have been developed to efficiently engineer T-cell specificity and enhance T-cell function. Chimeric antigen receptors (CAR) use the antibody variable segments to direct specificity against cell surface molecules. T-cell receptors (TCR) can redirect T cells to intracellular target proteins, fragments of which are presented in the peptide-binding groove of HLA molecules. A recent clinical trial with CAR-modified T cells redirected against the B-cell lineage antigen CD19 showed dramatic clinical benefit in chronic lymphocytic leukaemia patients. Similarly, impressive clinical responses were seen in melanoma and synovial cell carcinoma with TCR-modified T cells redirected against the melanocyte lineage antigen MART-1 and the testis-cancer antigen NY-ESO-1. However, on and off-target toxicity was associated with most of these clinical responses, and fatal complications have been observed in some patients treated with gene modified T cells. This review will discuss factors that might contribute to toxic side effects of therapy with gene modified T cells, and outline potential strategies to retain anticancer activity while reducing unwanted side effects.