Abstract Purpose: Immune dysregulation is described in multiple myeloma. While preclinical models suggest a role for altered T-cell immunity in disease progression, the contribution of immune dysfunction to clinical outcomes remains unclear. We aimed to characterize marrow-infiltrating T cells in newly diagnosed patients and explore associations with outcomes of first-line therapy. Experimental Design: We undertook detailed characterization of T cells from bone marrow (BM) samples, focusing on immune checkpoints and features of immune dysfunction, correlating with clinical features and progression-free survival. Results: We found that patients with multiple myeloma had greater abundance of BM regulatory T cells (Tregs) which, in turn, expressed higher levels of the activation marker CD25 compared with healthy donors. Patients with higher frequencies of Tregs had shorter PFS and a distinct Treg immune checkpoint profile (increased PD-1, LAG-3) compared with patients with lower frequencies of Tregs. Analysis of CD4 and CD8 effectors revealed that low CD4effector (CD4eff):Treg ratio and increased frequency of PD-1–expressing CD4eff cells were independent predictors of early relapse over and above conventional risk factors, such as genetic risk and depth of response. Ex vivo functional analysis and RNA sequencing revealed that CD4 and CD8 cells from patients with greater abundance of CD4effPD-1+ cells displayed transcriptional and secretory features of dysfunction. Conclusions: BM-infiltrating T-cell subsets, specifically Tregs and PD-1–expressing CD4 effectors, negatively influence clinical outcomes in newly diagnosed patients. Pending confirmation in larger cohorts and further mechanistic work, these immune parameters may inform new risk models, and present potential targets for immunotherapeutic strategies.