The tumor microenvironment (TME) plays an essential role in the development, proliferation, and survival of leukemic blasts in acute myeloid leukemia (AML). Within the bone marrow and peripheral blood, various phenotypically and functionally altered cells in the TME provide critical signals to suppress the anti-tumor immune response, allowing tumor cells to evade elimination. Thus, unraveling the complex interplay between AML and its microenvironment may have important clinical implications and are essential to directing the development of novel targeted therapies. This review summarizes recent advancements in our understanding of the AML TME and its ramifications on current immunotherapeutic strategies. We further review the role of natural products in modulating the TME to enhance response to immunotherapy.