Nowadays, Nanoparticle-based immunotherapeutic research has invoked global interest due to their unique properties. The immune system is a shielding structure that defends living things from external threats. Before the use of any materials in drug design, it is essential to study the immunological response to avoid triggering undesirable immune responses in the body. This review tries to summarize the properties, various applications, and immunotherapeutic aspects of NP-induced immunomodulation relating to therapeutic development and toxicity in human health. The role of NPs in the immune system and their modulatory functions, resulting in immunosuppression or immunostimulation, exerts benefits or dangers depending on their compositions, sizes, surface chemistry, and so forth. After NPs enter into the body, they can interact with body fluid exposing, them to different body proteins to form protein corona particles and other bio-molecules (DNA, RNA, sugars, etc.), which may alter their bioactivity. Phagocytes are the first immune cells that can interact with foreign materials including nanoparticles. Immunostimulation and immunosuppression operate in two distinct manners. Overall, functionalized nanocarriers optimized various therapeutic implications by stimulating the host immune system and regulating the tranquility of the host immune system. Among others, toxicity and bio-clearance of nanomaterials are always prime concerns at the preclinical and clinical stages before final approval. The interaction of nanoparticles with immune cells causes direct cell damage via apoptosis and necroses as well as immune signaling pathways also become influenced.