Plasma medicine is an emerging field that applies the science and engineering of physical plasma to biomedical applications. Low-temperature plasma, also known as cold plasma, is generated via the ionization of atoms in a gas, generally via exposure to strong electric fields, and consists of ions, free radicals, and molecules at varying energy states. Plasmas generated at low temperatures (approximately room temperature) have been used for applications in dermatology, oncology, and anti-microbial strategies. Despite current and ongoing clinical use, the exact mechanisms of action and the full range of effects of cold plasma treatment on cells are only just beginning to be understood. Direct and indirect effects of plasma on immune cells have the potential to be utilized for various applications such as immunomodulation, anti-infective therapies, and regulating inflammation. In this review, we combine diverse expertise in the fields of plasma chemistry, device design, and immunobiology to cover the history and current state of plasma medicine, basic plasma chemistry and their implications, the effects of cold atmospheric plasma on host cells with their potential immunological consequences, future directions, and the outlook and recommendations for plasma medicine.