Interferons (IFNs) are pleiotropic cytokines critical for regulation of epithelial cell functions and for immune system regulation. In cancer, IFNs contribute to tumor-intrinsic and -extrinsic mechanisms that determine the quality of antitumor immunity and response to immunotherapy. In this Review, we focus on the different types of tumor IFN sensitivity that determine dynamic tumor-immune interactions and their coevolution during cancer progression and metastasis. We extend the discussion to new evidence supporting immunotherapy-mediated immunoediting and the dual opposing roles of IFNs that lead to immune checkpoint blockade response or resistance. Understanding the intricate dynamic responses to IFN will lead to novel immunotherapeutic strategies to circumvent protumorigenic effects of IFN while exploiting IFN-mediated antitumor immunity.