Tumors intricately shape a highly immunosuppressive microenvironment, hampering effective antitumor immune responses through diverse mechanisms. Consequently, achieving optimal efficacy in cancer immunotherapy necessitates the reorganization of the tumor microenvironment and restoration of immune responses. Bladder cancer, ranking as the second most prevalent malignant tumor of the urinary tract, presents a formidable challenge. Immunotherapeutic interventions including intravesical BCG and immune checkpoint inhibitors such as atezolizumab, avelumab, and pembrolizumab have been implemented. However, a substantial unmet need persists as a majority of bladder cancer patients across all stages do not respond adequately to immunotherapy. Bladder cancer establishes a microenvironment that can actively hinder an efficient anti-tumor immune response. A deeper understanding of immune evasion mechanisms in bladder cancer will aid in suppressing recurrence and identifying viable therapeutic targets. This review seeks to elucidate mechanisms of immune evasion specific to bladder cancer and explore novel pathways and molecular targets that might circumvent resistance to immunotherapy.