The transformative success of antibodies targeting the PD-1 (programmed death 1) B7-H1 (B7 homolog 1) pathway (anti-PD therapy) has revolutionized cancer treatment. However, only a fraction of patients with solid tumors and some hematopoietic malignancies respond to anti-PD therapy, and the reason for failure in other patients is less known. By dissecting the mechanisms underlying this resistance, current studies reveal that the tumor microenvironment is a major location for resistance to occur. Furthermore, the resistance mechanisms appear to be highly heterogeneous. Here, we discuss recent human cancer data identifying mechanisms of resistance to anti-PD therapy. We review evidence for immune-based resistance mechanisms such as loss of neoantigens, defects in antigen presentation and interferon signaling, immune inhibitory molecules, and exclusion of T cells. We also review the clinical evidence for emerging mechanisms of resistance to anti-PD therapy, such as alterations in metabolism, microbiota, and epigenetics. Finally, we discuss strategies to overcome anti-PD therapy resistance and emphasize the need to develop additional immunotherapies based on the concept of normalization cancer immunotherapy.