Immunotherapy has shifted the clinical paradigm of cancer management. However, despite promising initial progress, immunotherapeutic approaches to cancer still suffer from relatively low response rates and the possibility of severe side effects, likely due to the low inherent immunogenicity of tumor cells, the immunosuppressive tumor microenvironment, and significant inter- and intratumoral heterogeneity. Recently, nanoformulations of prodrugs have been explored as a means to enhance cancer immunotherapy by simultaneously eliciting antitumor immune responses and reversing local immunosuppression. Prodrug nanomedicines, which integrate engineering advances in chemistry, oncoimmunology, and material science, are rationally designed through chemically modifying small molecule drugs, peptides, or antibodies to yield increased bioavailability and spatiotemporal control of drug release and activation at the target sites. Such strategies can help reduce adverse effects and enable codelivery of multiple immune modulators to yield synergistic cancer immunotherapy. In this review article, recent advances and translational challenges facing prodrug nanomedicines for cancer immunotherapy are overviewed. Last, key considerations are outlined for future efforts to advance prodrug nanomedicines aimed to improve antitumor immune responses and combat immune tolerogenic microenvironments.