Targeted cellular immunotherapy with bifunctional antibodies (bsAbs) has emerged as a promising therapeutic approach for cancer over the last two decades. Progress in antibody engineering has led to the generation of many different types of antibody-derived entities that display at least two binding specificities. Most bsAbs consist of large IgG-like proteins with multiple antigen-binding regions containing Fc parts or smaller entities without Fc. BsAbs have the potential to engage effector cells of the immune system, thereby overcoming some of the immune response escape mechanisms of tumor cells. Preclinical and clinical trials of various bsAb constructs have demonstrated impressive results in terms of immune effector cell retargeting and induction of efficient anti-tumor responses. This review provides an overview of the established bsAbs focusing on improvements in format and design as well as the mechanisms of action of the most promising candidates and describes the results of the most recent clinical studies.