Cancer is a systemic disease at a constant tug of war with the host immune system. The tumor microenvironment (TME) continually alters immune cells and modulates the immune response favorable for tumor cell survival, growth and metastasis. Tumor cells use various immune evasion mechanisms during cancer progression and are broadly classified into three phases: elimination, equilibrium, and escape. Throughout these phases, the degree of tumor immunogenicity is reformed, and systemic immunosuppression is developed to counteract host antitumor effector responses. A meticulous balance between effector and tolerogenic immune responses determines tumor fate. The surviving tumor cells advance toward cancer progression while developing peripheral immune tolerance and recruitment of immunosuppressive cells. TME induces pro-tumorigenic M2 polarization of tumor-associated macrophages (TAMs), which promote tumor progression. Immunosuppressive signals from the TME impair dendritic cell (DC)-mediated antigen presentation to naive T cells, thereby inducing T-cell tolerance and progressing tumor growth. Cancer cells also limit the effector functions of tumor-infiltrating lymphocytes (TILs) through the imposition of multifactorial constraints such as elevated acidity, immunosuppressive metabolites and enzymes, nutrient deficiency, hypoxia, and ionic imbalance. Altogether, these factors result in T-cell anergy and exhaustion. Additionally, the tumor milieu skews natural T regulatory cells (nTregs) and recruits inducible Tregs (iTregs) that further inhibit the effector function of antitumor agents, cytotoxic T cells. Furthermore, cancer cells in the TME impede antitumor function via the activation of immunological checkpoints. These suppressor cells further restrict antitumor immunity via an intricate mesh of immunosuppressive cytokines and chemokines. This chapter explores the various aspects of cell-mediated immunity and their differential roles in the TME and cancer progression, which might help develop anticancer immunotherapies.