The modulation of immune function represents a critical therapeutic strategy for managing autoimmune disorders, chronic inflammation, immunodeficiency states, and cancer. While synthetic immunomodulatory agents have demonstrated clinical efficacy, concerns regarding adverse effects, high costs, and limited accessibility have prompted renewed interest in plant-derived alternatives. This review examines the immunomodulatory potential of medicinal plants, focusing on bioactive phytochemicals, underlying molecular mechanisms, and translational opportunities for drug development. Numerous traditional medicinal plants, including Echinacea purpurea, Withania somnifera, Panax ginseng, Curcuma longa, and Astragalus membranaceus, have demonstrated capacity to modulate both innate and adaptive immune responses through diverse mechanisms. Key phytochemicals such as polysaccharides, alkaloids, terpenoids, flavonoids, and phenolic compounds influence cytokine production, regulate lymphocyte proliferation, enhance natural killer cell activity, and modulate pattern recognition receptor signaling. Preclinical studies in cellular and animal models have consistently demonstrated immunostimulatory or immunosuppressive effects depending on dosage, extraction method, and disease context. Clinical investigations, though limited in number and methodological rigor, suggest therapeutic potential in respiratory infections, inflammatory conditions, and adjuvant cancer therapy. However, challenges including phytochemical standardization, formulation optimization, pharmacokinetic limitations, herb-drug interactions, and regulatory compliance must be addressed. This review synthesizes current evidence on plant-derived immunomodulators and identifies critical gaps requiring further investigation to facilitate their rational integration into evidence-based therapeutic regimens and pharmaceutical development pipelines.