Recent approval of the first human complement pathway-directed therapeutics, along with high-profile genetic association studies, has catalyzed renewed biopharmaceutical interest in developing drugs that modulate the complement system. Substantial challenges remain, however, that must be overcome before widespread application of complement inhibitors in inflammatory and autoimmune diseases becomes possible. Among these challenges are the following: (1) defining the complement pathways and effector mechanisms that cause tissue injury in humans and determining whether the relative importance of each varies by disease, (2) blocking or modulating, using traditional small molecule or biologic approaches, the function of complement proteins whose circulating levels are very high and whose turnover rates are relatively rapid, especially in the setting of acute and chronic autoimmune diseases, and (3) avoiding infectious complications or impairment of other important physiological functions of complement when using systemically active complement-blocking agents. This chapter will review data that address these challenges to therapeutic development, with a focus on the development of a novel strategy of blocking specific complement pathways by targeting inhibitors using a recombinant portion of the human complement receptor type 2 (CR2/CD21) which specifically targets to sites of local complement C3 activation where C3 fragments are covalently fixed. Recently, the first of these CR2-targeted proteins has entered human phase I studies in the human disease paroxysmal nocturnal hemoglobinuria. The results of murine translational studies using CR2-targeted inhibitors strongly suggest that a guiding principle going forward in complement therapeutic development may well be to focus on developing strategies to modulate the pathway as precisely as possible by physically localizing therapeutic inhibitory effects.