Hepatocellular carcinoma (HCC) is the most common liver cancer, with poor survival rates in advanced stages due to late diagnosis, tumor heterogeneity, and therapy resistance. The tumor microenvironment (TME) in HCC has a crucial role in tumor progression, characterized by a complex interaction of immune cells, stromal components, and immunosuppressive signaling pathways. Chronic inflammation driven by viral infections, metabolic dysfunction, and alcohol consumption triggers an immunosuppressive TME, promoting immune evasion and tumor growth. Immune cell populations, such as myeloid-derived suppressor cells, regulatory T cells, and tumor-associated macrophages, contribute to immunosuppression, while cytotoxic T lymphocytes and natural killer cells exert anti-tumor effects. Recent advances in immunotherapy, mainly immune checkpoint inhibitors (ICIs) targeting programmed death-ligand 1 and programmed cell death protein 1 and cytotoxic T-lymphocyte-associated protein 4, have revolutionized HCC treatment, though response rates remain limited. Combined therapies using tyrosine kinase inhibitors, anti-angiogenic agents, and ICIs improve patient outcomes. This review discusses the immunological mechanisms contributing to HCC progression, the role of immune cell subsets in tumor evasion, and therapeutic interventions, from conventional treatments to advanced immunotherapies. Ongoing clinical trials, barriers to effective treatment, and future directions to enhance HCC management and patient survival will also be overviewed.