Abstract A number of cancer drugs activate innate immune pathways in tumor cells but unfortunately also compromise antitumor immune function. We discovered that inhibition of CARM1, an epigenetic enzyme and cotranscriptional activator, elicited beneficial antitumor activity in both cytotoxic T cells and tumor cells. In T cells, Carm1 inactivation substantially enhanced their antitumor function and preserved memory-like populations required for sustained antitumor immunity. In tumor cells, Carm1 inactivation induced a potent type 1 interferon response that sensitized resistant tumors to cytotoxic T cells. Substantially increased numbers of dendritic cells, CD8 T cells, and natural killer cells were present in Carm1-deficient tumors, and infiltrating CD8 T cells expressed low levels of exhaustion markers. Targeting of CARM1 with a small molecule elicited potent antitumor immunity and sensitized resistant tumors to checkpoint blockade. Targeting of this cotranscriptional regulator thus offers an opportunity to enhance immune function while simultaneously sensitizing resistant tumor cells to immune attack. Significance: Resistance to cancer immunotherapy remains a major challenge. Targeting of CARM1 enables immunotherapy of resistant tumors by enhancing T-cell functionality and preserving memory-like T-cell populations within tumors. CARM1 inhibition also sensitizes resistant tumor cells to immune attack by inducing a tumor cell–intrinsic type 1 interferon response. This article is highlighted in the In This Issue feature, p. 1861