The development and growth of many diseases are significantly influenced by immune dysregulation. Similarly, uncontrolled tumor growth occurs in cancer because the immune system is unable to identify and eradicate cancer cells. Therefore, to address this issue, cancer immunotherapy plays a crucial role in detecting tumors and inhibiting their growth. This immune-oncotherapy has gained significant interest over the last decade because of its relevant success in biomedical applications. The fundamental goal of immunotherapy in the war against cancer is to develop potent immunotherapies that have minimal side effects and excellent tumor selectivity. To develop these characteristics, nanotechnology offered promising opportunities for cancer immunotherapy. Cell membrane-coated nanoparticles (CMNPs) have recently evolved, which has a tremendous advantage over other nanoparticles (NPs). The CMNPs can be formed by wrapping cell membranes, which can camouflage the specific cell type, allowing these NPs to survive like "self" during blood circulation and escape immune cell capture. These provide NPs with increased biocompatibility, minimal immunogenicity, longer circulation, and targeted tumor therapy. These advantages have made CMNPs a potential delivery vehicle for immunostimulatory drugs, which can induce immunological responses and lead to cancer immunotherapy. Surface modification of CMNPs using cutting-edge genetic engineering techniques revolutionizes cancer immunotherapy to produce new nano-formulations with greater effectiveness. In this review, we briefly discuss the relationship between cancer and the immune system, various techniques of CMNPs synthesis, and the use of naturally occurring and genetically modified CMNPs for cancer immunotherapy.