Abstract Despite successes, thus far, a significant proportion of the patients treated with anti-PD1 antibodies have failed to respond. We use mouse tumor models of anti-PD1 sensitivity and resistance and flow cytometry to assess tumor-infiltrating immune cells immediately after therapy. We demonstrate that the expression levels of T-cell PD1 (PD1lo), myeloid, and T-cell PDL1 (PDL1hi) in the tumor microenvironment inversely correlate and dictate the efficacy of anti-PD1 mAb and function of intratumor CD8+ T cells. In sensitive tumors, we reveal a threshold for PD1 downregulation on tumor-infiltrating CD8+ T cells below which the release of adaptive immune resistance is achieved. In contrast, PD1hi T cells in resistant tumors fail to be rescued by anti-PD1 therapy and remain dysfunctional unless intratumor PDL1lo immune cells are targeted. Intratumor Tregs are partly responsible for the development of anti-PD1–resistant tumors and PD1hi CD8+ T cells. Our analyses provide a framework to interrogate intratumor CD8+ T-cell PD1 and immune PDL1 levels and response in human cancer. Cancer Res; 75(18); 3800–11. ©2015 AACR.