Immune responses to tumor-associated antigens (TAs) are often detectable in tumor-bearing hosts, but they fail to eliminate malignant cells or prevent the development of metastases. Patients with cancer generate robust immune responses to infectious agents (bacteria and viruses) perceived as a “danger signal” but only ineffective weak responses to TAs, which are considered as “self.” This fundamental difference in responses to self versus nonself is further magnified by the ability of tumors to subvert the host immune system. Tumors induce dysfunction and apoptosis in CD8⁺ antitumor effector cells and promote expansion of regulatory T cells, myeloid-derived suppressor cells, or both, which downregulate antitumor immunity, allowing tumors to escape from the host immune system. The tumor escape is mediated by several distinct molecular mechanisms. Recent insights into these mechanisms encourage expectations that a more effective control of tumor-induced immune dysfunction will be developed in the near future. Novel strategies for immunotherapy of cancer are aimed at the protection and survival of antitumor effector cells and also of central memory T cells in the tumor microenvironment.