Targeted immunotherapies hold great promise for the treatment and cure of autoimmune diseases. The efficacy of CD3-specific monoclonal antibody therapy in mice and humans stems from its ability to re-establish immune homeostasis in treated individuals. This occurs through modulation of the T-cell receptor (TCR)-CD3 complex (also termed antigenic modulation) and/or induction of apoptosis of activated autoreactive T cells, which leaves behind 'space' for homeostatic reconstitution that favours selective induction, survival and expansion of adaptive regulatory T cells, which establishes long-term tolerance. This Review summarizes the pre-clinical and clinical studies of CD3-specific monoclonal antibody therapy and highlights future opportunities to enhance the efficacy of this potent immunotherapeutic.