How PD-L1 expression is regulated in cancer is poorly understood. Here, we report that the ATP-binding activity of ERBB3 pseudokinase regulates PD-L1 gene expression in colorectal cancers (CRCs). ERBB3 is one of the four members of the EGF receptor family, all with protein tyrosine kinase domains. ERBB3 is a pseudokinase with a high binding affinity to ATP. We showed that ERBB3 ATP-binding inactivation mutant reduces tumorigenicity in genetically engineered mouse models and impairs xenograft tumor growth of CRC cell lines. The ERBB3 ATP-binding mutant cells dramatically reduce IFN-γ-induced PD-L1 expression. Mechanistically, ERBB3 regulates IFN-γ-induced PD-L1 expression through the IRS1-PI3K-PDK1-RSK-CREB signaling axis. CREB is the transcription factor that regulates PD-L1 gene expression in CRC cells. Knockin of a tumor-derived ERBB3 mutation located in the kinase domain sensitizes mouse colon cancers to anti-PD1 antibody therapy, suggesting that ERBB3 mutations could be predictive biomarkers for tumors amenable to immune checkpoint therapy.