The application of three-dimensional (3D) spheroids or organoids in drug testing and precision medicine has led to significant advancements in how cancer and other diseases are treated. Not only can these 3D structures mimic the architecture and structure of tumors, but organoids formed from primary patient samples are able to recapitulate the molecular and functional characteristics of the original patient tumors. These clinically and physiologically relevant organoids can therefore be used to address questions related to drug efficacy and resistance and can even be used to predict patient-specific drug responses. However, despite such evident advantages, the lack of a patient-specific tumor microenvironment (TME), or even the basic TME that includes sufficient immune cells and other cell types, limits the potential of these organoids in immunotherapy drug testing. As such, co-culture models of patient-derived organoids with immune cells have since been developed to explore cancer-immune interactions, monotherapy or combinatorial immunotherapy drug testing, and variable patient drug responses. Moreover, when coupled with artificial intelligence-driven platforms, these organoid models can be more efficiently utilized to identify better therapeutic options and improve health outcomes through precision medicine. This review aims to highlight the use of organoids and the broader implementations of such organoid models in functional precision medicine, particularly in the context of immunotherapy.