Regulatory T cells (Tregs) are fundamental to maintaining immune homeostasis by inhibiting immune responses to self-antigens and preventing the excessive activation of the immune system. Their functions extend beyond immune surveillance and subpopulations of tissue-resident Treg cells can also facilitate tissue repair and homeostasis. The unique ability to regulate aberrant immune responses has generated the concept of harnessing Tregs as a new cellular immunotherapy approach for reshaping undesired immune reactions in autoimmune diseases and allo-responses in transplantation to ultimately re-establish tolerance. However, a number of issues limit the broad clinical applicability of Treg adoptive immunotherapy, including the lack of antigen specificity, heterogeneity within the Treg population, poor persistence, functional Treg impairment in disease states, and in vivo plasticity that results in the loss of suppressive function. Although the early-phase clinical trials of Treg cell therapy have shown the feasibility and tolerability of the approach in several conditions, its efficacy has remained questionable. Leveraging the smart tools and platforms that have been successfully developed for primary T cell engineering in cancer, the field has now shifted towards "next-generation" adoptive Treg immunotherapy, where genetically modified Treg products with improved characteristics are being generated, as regards antigen specificity, function, persistence, and immunogenicity. Here, we review the state of the art on Treg adoptive immunotherapy and progress beyond it, while critically evaluating the hurdles and opportunities towards the materialization of Tregs as a living drug therapy for various inflammation states and the broad clinical translation of Treg therapeutics.