Immunotherapies such as immune checkpoint blockade and adoptive cell transfer have revolutionized cancer treatment, but further progress is hindered by our limited understanding of tumor resistance mechanisms. Emerging technologies now enable the study of tumors at the single-cell level, providing unprecedented high-resolution insights into the genetic makeup of the tumor microenvironment and immune system that bulk genomics cannot fully capture. Here, we highlight the recent key findings of the use of single-cell RNA sequencing to deconvolute heterogeneous tumors and immune populations during immunotherapy. Single-cell RNA sequencing has identified new crucial factors and cellular subpopulations that either promote tumor progression or leave tumors vulnerable to immunotherapy. We anticipate that the strategic use of single-cell analytics will promote the development of the next generation of successful, rationally designed immunotherapeutics.