Cyclophosphamide is an alkylating agent belonging to the group of oxazaphosporines. As cyclophosphamide is in clinical use for more than 40 years, there is a lot of experience using this drug for the treatment of cancer and as an immunosuppressive agent for the treatment of autoimmune and immune-mediated diseases. Besides antimitotic and antireplicative effects, cyclophosphamide has immunosuppressive as well as immunomodulatory properties. Cyclophosphamide shows selectivity for T cells and is therefore now frequently used in tumour vaccination protocols and to control post-transplant allo-reactivity in haplo-identical unmanipulated bone marrow after transplantation. The schedule of administration is of special importance for the immunological effect: while cyclophosphamide can be used in high-dose therapy for the complete eradication of haematopoietic cells, lower doses of cyclophosphamide are relatively selective for T cells. Of special interest is the fact that a single administration of low-dose cyclophosphamide is able to selectively suppress regulatory T cells (T_regs). This effect can be used to counteract immunosuppression in cancer. However, cyclophosphamide can also increase the number of myeloid-derived suppressor cells. Combination of cyclophosphamide with other immunomodulatory agents could be a promising approach to treat different forms of advanced cancer.