Understanding tumor immune microenvironments is critical for identifying immune modifiers of cancer progression and developing cancer immunotherapies. Recent applications of single-cell RNA sequencing (scRNA-seq) in dissecting tumor microenvironments have brought important insights into the biology of tumor-infiltrating immune cells, including their heterogeneity, dynamics, and potential roles in both disease progression and response to immune checkpoint inhibitors and other immunotherapies. This review focuses on the advances in knowledge of tumor immune microenvironments acquired from scRNA-seq studies across multiple types of human tumors, with a particular emphasis on the study of phenotypic plasticity and lineage dynamics of immune cells in the tumor environment. We also discuss several imminent questions emerging from scRNA-seq observations and their potential solutions on the horizon. Expected final online publication date for the Annual Review of Immunology, Volume 39 is April 2021. Please see http://www.annualreviews.org/page/journal/pubdates for revised estimates.