Biomarker studies have shown that expression of the T-cell coregulatory ligand PDL1 on tumor cells correlates with clinical responsiveness to the PD1 antibody nivolumab. Here, we report the findings of a preclinical cancer vaccine study demonstrating vaccine-dependent PDL1 upregulation in the tumor microenvironment. We formulated an IFNγ-inducing cancer vaccine called TEGVAX that combined GM-CSF and multiple Toll-like receptor agonists to increase the number of activated dendritic cells. Treatment of established tumors with TEGVAX retarded tumor growth in a manner associated with enhanced systemic antitumor immunity. Unexpectedly, TEGVAX also upregulated PDL1 expression in the tumor microenvironment, possibly explaining why tumors were not eliminated completely. In support of this likelihood, PDL1 upregulation in this setting relied upon IFNγ-expressing tumor-infiltrating CD4⁺ and CD8⁺ T cells and administration of a PD1-blocking antibody with TEGVAX elicited complete regression of established tumors. Taken together, our findings provide a mechanistic rationale to combine IFNγ-inducing cancer vaccines with immune checkpoint blockade. Cancer Res; 74(15); 4042–52. ©2014 AACR.