Bispecific and bifunctional monoclonal antibodies as second generation monoclonals, produced by conventional chemical or somatic methods, have proved useful in the immunodiagnosis and immunotherapy of cancer and other diseases. Recombinant antibodies produced by genetic engineering techniques have also become available for use in preclinical and clinical studies. Furthermore, through genetic engineering, it is possible to remove or add on key protein domains in order to create designer antibody molecules with two or more desired functions. This review summarizes the strategies for development of single chain variable fragment (scFv) bifunctional and bispecific antibodies. The advantages and disadvantages as well as the problems of generating the various bispecific and bifunctional antibody constructs are reported and discussed. Since conventionally prepared bispecific and bifunctional monoclonal antibodies have already shown promise in clinical trials and results from preclinical studies of recombinant bispecific antibodies are encouraging, clinical trials in humans of recombinant bispecific and bifunctional antibodies, as a new generation of biologicals, are likely to be the thrust in the next decade and beyond.