Type I allergy represents an important health problem that affects more than 25% of the population in industrialized countries. Specific immunotherapy is one of the few causative treatment approaches for type I allergy and is currently performed with crude allergen extracts, which consist of a mixture of allergenic and nonallergenic components, are difficult to standardize and cannot be applied according to the patient’s reactivity profile. With the introduction of molecular biological techniques into allergy research, a large panel of individual recombinant allergens has become available. Recombinant allergens can be used for improved diagnosis of allergy to determine the patient’s sensitization profile, which is a prerequisite to select the allergens for patient-tailored immunotherapy. They allow the elucidation of the properties of allergens and of the mechanisms of allergy as well as of the mechanisms of immunotherapy. Moreover, recombinant allergens allow the development of hypoallergenic allergen derivatives with reduced allergenic activity and retained immunogenicity. First immunotherapy trials with hypoallergenic allergen derivatives have shown that this treatment might improve immunotherapy in the near future. This review summarizes the results, which were obtained with recombinant allergens and hypoallergenic allergen derivatives. The experiences from the in vitro and in vivo evaluation of the hypoallergenic derivatives and from clinical studies as well as the contribution of hypoallergenic derivatives to develop new treatment strategies and possibly prophylactic vaccination strategies are discussed.