Since their discovery, antibodies have been viewed as ideal candidates or "magic bullets" for use in targeted therapy in the fields of cancer, autoimmunity, and chronic inflammatory disorders. A wave of antibody-dedicated research followed, which resulted in the clinical approval of a first generation of monoclonal antibodies for cancer therapy such as rituximab (1997) and cetuximab (2004), and infliximab (2002) for the treatment of autoimmune diseases. More recently, the development of antibodies that prevent checkpoint-mediated inhibition of T cell responses invigorated the field of cancer immunotherapy. Such antibodies induced unprecedented long-term remissions in patients with advanced stage malignancies, most notably melanoma and lung cancer, that do not respond to conventional therapies. In this review, we will recapitulate the development of antibody-based therapy, and detail recent advances and new functions, particularly in the field of cancer immunotherapy. With the advent of recombinant DNA engineering, a number of rationally designed molecular formats of antibodies and antibody-derived agents have become available, and we will discuss various molecular formats including antibodies with improved effector functions, bispecific antibodies, antibody-drug conjugates, antibody-cytokine fusion proteins, and T cells genetically modified with chimeric antigen receptors. With these exciting advances, new antibody-based treatment options will likely enter clinical practice and pave the way toward more successful control of malignant diseases.