With the recognition of oncolytic virotherapy as an immunotherapy, the distinct interactions between oncolytic agents and the immune system have come into focus. The role of the immune system in oncolytic virotherapy is somewhat ambiguous: While preexisting or arising immunity directed against viral antigens may preclude efficient viral replication and spread, immunity directed against tumor antigens is considered essential for long-term treatment success. Aside from the antiviral and antitumor immune status of the patient, the specific immunological microenvironment in a given tumor adds an additional layer of complexity.In this review we focus on the case of measles virus, which has long been known for its multifaceted interplay with the immune system. The high prevalence of measles-neutralizing antibodies in the general population may pose additional challenges. The oncolytic measles virus vector platform offers manifold opportunities for tumor-targeted immunomodulation. This review provides a survey of immunomodulation in the context of measles virotherapy including strategies to suppress or circumvent antiviral immunity as well as enhance antitumor immunity that have been pursued in preclinical and clinical studies. Understanding and selective manipulation of the intricate balance between antiviral and antitumor immunity will be crucial to develop the full potential of oncolytic virotherapy.