Recently, the potential use of cold atmospheric pressure plasma (CAP) in cancer treatment has gained increasing interest. Especially the enhanced selective killing of tumor cells compared to normal cells has prompted researchers to elucidate the molecular mechanisms for the efficacy of CAP in cancer treatment. This review summarizes the current understanding of how CAP triggers intracellular pathways that induce growth inhibition or cell death. We discuss what factors may contribute to the potential selectivity of CAP towards cancer cells compared to their non-malignant counterparts. Furthermore, the potential of CAP to trigger an immune response is briefly discussed. Finally, this overview demonstrates how these concepts bear first fruits in clinical applications applying CAP treatment in head and neck squamous cell cancer as well as actinic keratosis. Although significant progress towards understanding the underlying mechanisms regarding the efficacy of CAP in cancer treatment has been made, much still needs to be done with respect to different treatment conditions and comparison of malignant and non-malignant cells of the same cell type and same donor. Furthermore, clinical pilot studies and the assessment of systemic effects will be of tremendous importance towards bringing this innovative technology into clinical practice.