With the success of immune checkpoint inhibitors (ICIs), significant progress has been made in the field of cancer immunotherapy. Despite the long-lasting outcomes in responders, the majority of patients with cancer still do not benefit from this revolutionary therapy. Increasing evidence suggests that one of the major barriers limiting the efficacy of immunotherapy seems to coalesce with the hypoxic tumor microenvironment (TME), which is an intrinsic property of all solid tumors. In addition to its impact on shaping tumor invasion and metastasis, the hypoxic TME plays an essential role in inducing immune suppression and resistance though fostering diverse changes in stromal cell biology. Therefore, targeting hypoxia may provide a means to enhance the efficacy of immunotherapy. In this review, the potential impact of hypoxia within the TME, in terms of key immune cell populations, and the contribution to immune suppression are discussed. In addition, we outline how hypoxia can be manipulated to tailor the immune response and provide a promising combinational therapeutic strategy to improve immunotherapy.