Post-translational modification (PTM) is an essential mechanism that regulates protein function within cells, influencing aspects such as protein activity, stability, subcellular localization, and interactions with other molecules through the addition or removal of chemical groups on amino acid residues. One notable type of PTM is UFMylation, a recently discovered modification process that involves the covalent attachment of UFM1 to lysine residues on target proteins. This process is facilitated by a specific enzyme system that includes the UFM1-activating enzyme, the UFM1-conjugating enzyme, and the UFM1-specific ligase. UFMylation is crucial for various cellular functions, such as responding to endoplasmic reticulum stress and DNA-damage response, and it is linked to the development and progression of several human diseases, including cancers, highlighting its importance in biological processes. Despite this significance, the range of substrates, regulatory mechanisms, and biological processes associated with UFMylation are not well understood, with only a few substrates having been characterized. Here, we focus on the molecular mechanisms of UFMylation, its implications in tumorigenesis, and its interactions with tumor suppressive and oncogenic signaling pathways. Furthermore, we employed bioinformatics approaches to analyze UFMylation's role in cancer, focusing on expression profiles, mutations, prognosis, drug sensitivity, and immune infiltration to explore its therapeutic potential in immunotherapy.