Bacteriophages (Phages) are antibacterial viruses that are unaffected by antibiotic drug resistance. Many Phase I and Phase II phage therapy clinical trials have shown acceptable safety profiles. However, none of the completed trials could yield data supporting the promising observations noted in the experimental phage therapy. These trials have mainly focused on phage suspensions without enough attention paid to the stability of phage during processing, storage, and administration. This is important because in vivo studies have shown that the effectiveness of phage therapy greatly depends on the ratio of phage to bacterial concentrations (multiplicity of infection) at the infection site. Additionally, bacteria can evade phages through the development of phage-resistance and intracellular residence. This review focuses on the use of phage therapy against bacteria that survive within the intracellular niches. Recent research on phage behavior reveals that some phage can directly interact with, get internalized into, and get transcytosed across mammalian cells, prompting further research on the governing mechanisms of these interactions and the feasibility of harnessing therapeutic phage to target intracellular bacteria. Advances to improve the capability of phage attacking intracellular bacteria using formulation approaches such as encapsulating/conjugating phages into/with vector carriers via liposomes, polymeric particles, inorganic nanoparticles, and cell penetrating peptides, are summarized. While promising progress has been achieved, research in this area is still in its infancy and warrants further attention.