Abstract Purpose: Merkel cell carcinoma (MCC) is a highly immunogenic skin cancer. Although essentially all MCCs are antigenic through viral antigens or high tumor mutation burden, MCC has a response rate of only approximately 50% to PD-(L)1 blockade suggesting barriers to T-cell responses. Prior studies of MCC immunobiology have focused on CD8 T-cell infiltration and their exhaustion status, while the role of innate immunity, particularly myeloid cells, in MCC remains underexplored. Experimental Design: We utilized single-cell transcriptomics from 9 patients with MCC and multiplex IHC staining of 54 patients’ preimmunotherapy tumors, to identify myeloid cells and evaluate association with immunotherapy response. Results: Single-cell transcriptomics identified tumor-associated macrophages (TAM) as the dominant myeloid component within MCC tumors. These TAMs express an immunosuppressive gene signature characteristic of monocytic myeloid-derived suppressor cells and importantly express several targetable immune checkpoint molecules, including PD-L1 and LILRB receptors, that are not present on tumor cells. Analysis of 54 preimmunotherapy tumor samples showed that a subset of TAMs (CD163+, CD14+, S100A8+) selectively infiltrated tumors that had significant CD8 T cells. Indeed, higher TAM prevalence was associated with resistance to PD-1 blockade. While spatial interactions between TAMs and CD8 T cells were not associated with response, myeloid transcriptomic data showed evidence for cytokine signaling and expression of LILRB receptors, suggesting potential immunosuppressive mechanisms. Conclusions: This study further characterizes TAMs in MCC tumors and provides insights into their possible immunosuppressive mechanism. TAMs may reduce the likelihood of treatment response in MCC by counteracting the benefit of CD8 T-cell infiltration.