After implantation of a biomaterial, both the host immune system and properties of the material determine the local immune response. Through triggering or modulating the local immune response, materials can be designed towards a desired direction of promoting tissue repair or regeneration. High-throughput sequencing technologies such as single-cell RNA sequencing (scRNA-seq) emerging as a powerful tool for dissecting the immune micro-environment around biomaterials, have not been fully utilized in the field of soft tissue regeneration. In this review, we first discussed the procedures of foreign body reaction in brief. Then, we summarized the influences that physical and chemical modulation of biomaterials have on cell behaviors in the micro-environment. Finally, we discussed the application of scRNA-seq in probing the scaffold immune micro-environment and provided some reference to designing immunomodulatory biomaterials. The foreign body response consists of a series of biological reactions. Immunomodulatory materials regulate immune cell activation and polarization, mediate divergent local immune micro-environments and possess different tissue engineering functions. The manipulation of physical and chemical properties of scaffolds can modulate local immune responses, resulting in different outcomes of fibrosis or tissue regeneration. With the advancement of technology, emerging techniques such as scRNA-seq provide an unprecedented understanding of immune cell heterogeneity and plasticity in a scaffold-induced immune micro-environment at high resolution. The in-depth understanding of the interaction between scaffolds and the host immune system helps to provide clues for the design of biomaterials to optimize regeneration and promote a pro-regenerative local immune micro-environment.