The immune system and cancer cells interact intricately during the growth of tumors, and the dynamic interplay between immune activation and suppression greatly influences the cancer outcome. Natural killer cells (NK), cytotoxic T lymphocytes (CTLs) and Dendritic cells (DC), employ diverse mechanisms, to combat cancer. However, the challenges posed by factors such as chronic inflammation and the immunosuppressive tumor microenvironment (TME) often hinder immune cells' ability to detect and eliminate tumors accurately. Immunotherapy offers a promising approach, reprogramming the immune system to target and eliminating cancer cells while minimizing side effects, enhancing immune memory, and lowering the risk of metastasis and relapse compared to traditional treatments like radiation and surgery. Nanotechnology presents a potential solution by enabling safer, more efficient drug delivery through nanoparticles. These nanoengineered drugs can be tailored for controlled activation and release. Improving TME characters holds potential for enhancing personalized immunotherapy and addressing T cell availability issues within tumor sites, particularly when combined with existing therapies. This review discusses TMEs and the strategies to overcome immunosuppression in TME, and various immune cell-based strategies to improve antitumor response. It also focuses on the strategies for constructing microenvironment responsive nanoplatforms based upon the factors present at higher levels in TME like acidic pH, hypoxia facilitated by poor oxygen supply, higher expression of certain enzymes, and other factors such light, ultrasound and magnetic field. Combination immune therapies combined with immunotherapy include photodynamic therapy, photothermal therapy, chemotherapy, gene therapy and radiotherapy, revealing a high level of anticancer activity in comparison to a single therapy, enhancing immunogenicity, promoting therapeutic efficacy, and lowering metastasis. In conclusion, cancer immunotherapy is a potential technique to combat cancer cells and boost the immune system, hindering their growth and recurrence. In order to prevent cancer, it helps the immune system target cancer cells selectively and strengthens its long-term memory. Clinical trials are extending the application of immunotherapy and identifying strategies to improve the immune system tumor-fighting capabilities. Immunotherapy has enormous promise and gives hope for more successful cancer treatment.