SET domain bifurcated methyltransferase 1 (SETDB1) serves as a histone lysine methyltransferase, catalyzing the di- and tri-methylation of histone H3K9. Mounting evidence indicates that the abnormal expression or activity of SETDB1, either through amplification or mutation, plays a crucial role in tumorigenesis and progression. This is particularly evident in the context of tumor immune evasion and resistance to immune checkpoint blockade therapy. Furthermore, there is a robust association between SETDB1 dysregulation and an unfavorable prognosis across various types of tumors. The oncogenic role of SETDB1 primarily arises from its methyltransferase function, which contributes to the establishment of a condensed and transcriptionally inactive heterochromatin state. This results in the inactivation of genes that typically hinder cancer development and silencing of retrotransposons that could potentially trigger an immune response. These findings underscore the substantial potential for SETDB1 as an anti-tumor therapeutic target. Nevertheless, despite significant strides in recent years in tumor biology research, challenges persist in SETDB1-targeted therapy. To better facilitate the development of anti-tumor therapy targeting SETDB1, we have conducted a comprehensive review of SETDB1 in this account. We present the structure and function of SETDB1, its role in various tumors and immune regulation, as well as the advancements made in SETDB1 antagonists. Furthermore, we discuss the challenges encountered and provide perspectives for the development of SETDB1-targeted anti-tumor therapy.