The two scientists will share the 9 million Swedish kronor ($1.01 million) that comes with the prize. Their research led to drugs that release the brakes and constitute "a landmark in our fight against cancer", said the Nobel Assembly of Sweden's Karolinska Institute, which selects winners of the annual prestigious award.
The scientists' work led to treatments targeting proteins made by some immune system cells that act as a "brake" on the body's natural defenses eradicating cancer cells.
Honjo, who has been a professor at Kyoto University since 1984, separately discovered a second protein on immune cells and revealed that it too operated as a brake, but with a different mechanism.
Dr. James P. Allison, University of Texas MD Anderson Cancer Center, poses for a photo in NY in 2015.
"Allison's and Honjo's discoveries have added a new pillar in cancer therapy".
However, "immune checkpoint therapy" as it is known has since revolutionised the battle against the disease, and has fundamentally changed the way we view how cancer can be managed.
Allison's research was conducted at the University of California, Berkeley.
Trade deal largely spares Canada, Mexico from any Trump auto tariffs
Canada has made some concessions, including removing help for its dairy farmers, in return for protections for its auto industry. In addition, Ottowa has argued tariffs imposed on steel and aluminum imports should be halted as part of a new NAFTA deal.
"With another postdoc I did some side experiments on how tumors are recognized by the immune system", Allison told the Journal of Clinical Investigation in 2016.
Antibodies against PD-1 have been approved by the US Food and Drug Administration as an investigational new drug for the treatment of cancer.
"However, advanced cancer remains immensely hard to treat, and novel therapeutic strategies are desperately needed", the Nobel Assembly said.
The academy hopes to award both the 2018 prize and the 2019 literature prize next year.
The Nobel Peace Prize will be awarded in Oslo on Friday, while the announcement of the economics prize will cap off this year's Nobel season on October 8.
No Nobel Literature Prize is being given this year because the Swedish Academy, the body that choses the literature victor, has been in turmoil after sex abuse and financial scandal allegations.