Dry eye is currently one of the most common ocular surface disease. It can lead to ocular discomfort and even cause visual impairment, which greatly affects the work and quality of life of patients. With the increasing incidence of dry eye disease (DED) in recent years, the disease is receiving more and more attention, and has become one of the hot research fields in ophthalmology research. Recently, with the in-depth research on the etiology, pathogenesis and treatment of DED, it has been shown that defects in immune regulation is one of the main pathological mechanisms of DED. Since the non-specific and specific immune response of the ocular surface are jointly regulated, a variety of immune cells and inflammatory factors are involved in the development of DED. The conventional treatment of DED is the application of artificial tears for lubricating the ocular surface. However, for moderate-to-severe DED, treatment with anti-inflammatory drugs is necessary. In this review, the immunomodulatory mechanisms of DED and the latest research progress of its related treatments including Chinese medicine will be discussed.