Immunotherapy-induced pseudomembranous colitis (PMC) is an uncommon but increasingly recognized adverse effect of immune checkpoint inhibitors, particularly in patients with advanced malignancies. We present a case of a 68-year-old male with gastric adenocarcinoma undergoing treatment with immunotherapy and chemotherapy, who developed symptoms of PMC. Workup for Clostridium difficile and other common etiologies was negative. Colonoscopy revealed severe mucosal congestion and yellowish-green exudates, consistent with PMC. Based on the biopsy results and clinical presentation, after excluding common etiologies, immunotherapy-induced PMC was suspected. The patient responded to steroid therapy, with gradual improvement and a tapering regimen upon discharge. This case underscores the diagnostic challenges in identifying the etiology of PMC, particularly when it presents with diffuse involvement of the colon, which is an uncommon presentation for immunotherapy-related colitis. The overlap in clinical, endoscopic, and histopathological findings with other forms of colitis, such as Clostridium difficile infection (CDI) and inflammatory bowel disease, highlights the need for heightened awareness among clinicians. This case highlights the diagnostic challenges in recognizing immunotherapy-induced PMC, particularly with atypical, diffuse colonic involvement. The overlapping features with other colitis make timely diagnosis difficult. Further research is needed to refine diagnostic criteria and management strategies for immunotherapy induced colitis (IMC).