Ferroptosis is a newly identified iron-dependent type of regulated cell death that can also be regarded as death caused by the specific collapse of the lipid antioxidant defence machinery. Ferroptosis has gained increasing attention as a potential therapeutic strategy for therapy-resistant cancer types. However, many ferroptosis-inducing small molecules do not reach the pharmacokinetic requirements for their effective clinical use yet. Nevertheless, their clinical optimization is under development. In this review, we summarize the current understanding of molecular pathways regulating ferroptosis, how cells protect themselves from the induction of ferroptotic cell death, and how a better understanding of cancer cell metabolism can represent vulnerabilities for ferroptosis-based therapies. Lastly, we discuss the context-dependent effect of ferroptosis on various cell types within the tumor microenvironment and address controversies on how tissue ferroptosis might impact systemic cancer immunity in a paracrine manner.