Despite rapid progress in the field, scalable high-yield production of AAV is still one of the critical bottlenecks the manufacturing sector is facing. The insect cell-baculovirus expression vector system (IC-BEVS) has emerged as a mainstream platform for a scalable production of recombinant proteins with clinically approved products for human use. In this review, we provide a detailed overview on advancements in IC-BEVS for rAAV production. Since the first report of baculovirus induced production of rAAV in insect cells in 2002, this platform has undergone significant evolutions. The original three baculovirus system was improved to enhance expression stability and further streamlined to reduce the number of baculoviruses to two and eventually one. The one baculovirus system consisting of an inducible packaging insect cell line was further improved to enhance the AAV vector quality and potency. In parallel, implementation of advanced manufacturing approaches and control of critical processing parameters have demonstrated promising results with process validation in large scale bioreactor runs. Moreover, optimization of molecular design of vectors to enable higher cell-specific yield of functional AAV particles in combination with bioprocess intensification strategies may further contribute to addressing current and future manufacturing challenges.