Oral potentially malignant disorders (OPMD) are precursors of oral squamous cell carcinoma (OSCC), and the presence of oral epithelial dysplasia (OED) in OPMD confers an increased risk of malignant transformation. Emerging evidence has indicated a role for the immune system in OPMD disease progression; however, the underlying immune mechanisms remain elusive. In this study, we used immune signatures established from cancer to delineate the immune profiles of moderate and severe OED, which are considered high-risk OPMD. We demonstrated that moderate and severe OEDs exhibit high lymphocyte infiltration and upregulation of genes involved in both immune surveillance (major histocompatibility complex-I, T cells, B cells and cytolytic activity) and immune suppression (immune checkpoints, T regulatory cells, and tumor-associated macrophages). Notably, we identified three distinct subtypes of moderate and severe OED: immune cytotoxic, non-cytotoxic and non-immune reactive. Active immune surveillance is present in the immune cytotoxic subtype, whereas the non-cytotoxic subtype lacks CD8 immune cytotoxic response. The non-immune reactive subtype showed upregulation of genes involved in the stromal microenvironment and cell cycle. The lack of T cell infiltration and activation in the non-immune reactive subtype is due to the dysregulation of CTNNB1, PTEN and JAK2. This work suggests that moderate and severe OED that harbor the non-cytotoxic or non-immune reactive subtype are likely to progress to cancer. Overall, we showed that distinct immune responses are present in high-risk OPMD, and revealed targetable pathways that could lead to potential new approaches for non-surgical management of OED.