Immunotherapy that harnesses the human immune system to fight cancer has received widespread attention and become a mainstream strategy for cancer treatment. Cancer immunotherapy not only eliminates primary tumors but also treats metastasis and recurrence, representing a major advantage over traditional cancer treatments. Recently with the development of nanotechnology, there exists much work applying nanomaterials to cancer immunotherapy on the basis of their excellent physiochemical properties, such as efficient tissue-specific delivery function, huge specific surface area, and controllable surface chemistry. Consequently, nanotechnology holds significant potential in improving the efficacy of cancer immunotherapy. Nanotechnology-based immunotherapy mainly manifests its inhibitory effect on tumors via two different approaches: one is to produce an effective anti-tumor immune response during tumorigenesis, and the other is to enhance tumor immune defense ability by modulating the immune suppression mechanism in the tumor microenvironment. With the success of tumor immunotherapy, understanding the interaction between the immune system and smart nanomedicine has provided vigorous vitality for the development of cancer treatment. This review highlights the application, progress, and prospect of nanomedicine in the process of tumor immunoediting and also discusses several engineering methods to improve the efficiency of tumor treatment.