Ferroptosis is an iron-dependent, non-apoptotic form of regulated cell death characterized by lipid peroxidation and oxidative stress. Emerging evidence highlights its pivotal role in modulating immune cell survival, homeostasis, and function. This review comprehensively examines the mechanistic underpinnings of ferroptosis, including disruptions in lipid, iron, amino acid metabolism, and antioxidant systems, and their relevance to innate and adaptive immunity. Distinct immune cell subsets exhibit variable susceptibility to ferroptosis based on their lipid composition, metabolic demands, and redox balance. Ferroptosis influences neutrophils, macrophages, dendritic cells, NK cells, T lymphocytes, and B cells, thereby modulating immune responses across diverse disease settings. We further discuss the context-dependent contributions of ferroptosis to major immune-related diseases, such as cancer, autoimmune disorders, infections, allergies, and inflammatory conditions. Ferroptosis can either dampen protective immune responses or exacerbate immunopathology, underscoring its dual role in immune regulation. Therapeutic modulation of ferroptosis, through inhibitors or inducers, offers promising strategies to restore immune balance or enhance disease control. Understanding the interplay between ferroptosis and immunity provides novel insights into disease mechanisms and highlights emerging opportunities for targeted interventions. This review aims to bridge current mechanistic knowledge with translational potential, advocating for ferroptosis-centered approaches in immunotherapy and immune-mediated disease management.