The advent of next-generation genome engineering tools like CRISPR-Cas9 has transformed the field of gene therapy, rendering targeted treatment for several incurable diseases. Hematopoietic stem and progenitor cells (HSPCs) continue to be the ideal target cells for gene manipulation due to their long-term repopulation potential. Among the gene manipulation strategies such as lentiviral gene augmentation, non-homologous end joining (NHEJ)-mediated gene editing, base editing and prime editing, only the homology-directed repair (HDR)-mediated gene editing provides the option of inserting a large transgene under its endogenous promoter or any desired locus. In addition, HDR-mediated gene editing can be applied for the gene knock-out, correction of point mutations and introduction of beneficial mutations. HSPC gene therapy studies involving lentiviral vectors and NHEJ-based gene-editing studies have exhibited substantial clinical progress. However, studies involving HDR-mediated HSPC gene editing have not yet progressed to the clinical testing. This suggests the existence of unique challenges in exploiting HDR pathway for HSPC gene therapy. Our review summarizes the mechanism, recent progresses, challenges, and the scope of HDR-based gene editing for the HSPC gene therapy.