Koala populations are currently declining and under threat from koala retrovirus (KoRV) infection both in the wild and in captivity. KoRV is assumed to cause immunosuppression and neoplastic diseases, favoring chlamydiosis in koalas. Currently, 10 KoRV subtypes have been identified, including an endogenous subtype (KoRV-A) and nine exogenous subtypes (KoRV-B to KoRV-J). The host’s immune response acts as a safeguard against pathogens. Therefore, a proper understanding of the immune response mechanisms against infection is of great importance for the host’s survival, as well as for the development of therapeutic and prophylactic interventions. A vaccine is an important protective as well as being a therapeutic tool against infectious disease, and several studies have shown promise for the development of an effective vaccine against KoRV. Moreover, CRISPR/Cas9-based genome editing has opened a new window for gene therapy, and it appears to be a potential therapeutic tool in many viral infections, which could also be investigated for the treatment of KoRV infection. Here, we discuss the recent advances made in the understanding of the immune response in KoRV infection, as well as the progress towards vaccine development against KoRV infection in koalas.