Cancer chemotherapy drugs have long been considered immune suppressive. However, more recent data indicate that some cytotoxic drugs effectively treat cancer in part by facilitating an immune response to the tumor when given at the standard dose and schedule. These drugs induce a form of tumor cell death that is immunologically active, thereby inducing an adaptive immune response specific for the tumor. In addition, cancer chemotherapy drugs can promote tumor immunity through ancillary and largely unappreciated immunologic effects on both the malignant and normal host cells present within the tumor microenvironment. These more subtle immunomodulatory effects are dependent on the drug itself, its dose, and its schedule in relation to an immune-based intervention. The recent approvals of two new immune-based therapies for prostate cancer and melanoma herald a new era in cancer treatment and have led to heightened interest in immunotherapy as a valid approach to cancer treatment. A detailed understanding of the cellular and molecular basis of interactions between chemotherapy drugs and the immune system is essential for devising the optimal strategy for integrating new immune-based therapies into the standard of care for various cancers, resulting in the greatest long-term clinical benefit for cancer patients.