Introduction: The multiple myeloma (MM) bone marrow (BM) microenvironment promotes tumor cell growth, survival, and drug resistance, while also conferring immunosuppression. This involves crosstalk between the myeloma cells and the components of BM microenvironment which can be facilitated or hindered by epigenetic modifiers altering the gene expression of receptors. Among those, regulatory T (Tregs) cells are essential to control peripheral tolerance and response to foreign and tumor antigens. Tregs within the BM niche play a significant role in the suppression of antitumor immune responses and limiting the beneficial response of immunotherapy in MM. Here, we investigated the impact of the Polycomb-like protein PHF19/PCL3, an epigenetic gene whose high level predicts poor prognosis in patients with MM, on the immunosuppressive BM microenvironment. Methods & Results: We first investigated how PHF19 overexpression would affect the microenvironment by using an ex vivo co-culture of MM cells with PBMCs or purified CD3+ T cells. MM cells that overexpressed PHF19 by lenti-virus infection (PHF19-OE cells) induced 2-4-fold higher conversion of conventional T cells (Tcon) into induced regulatory T cells (iTregs) (n=5, day 4). In addition, PHF19-OE MM cells increased the frequency of iTreg at later time points (day 7) and upregulated cell proliferation (CCND1, CCND2), anti-apoptosis (BCL2, BCL2L1), and Treg-related genes (TGFβ1, IL-10, Foxp3) (P < .0001). Moreover, enhanced checkpoint marker (PD1, TIM3, LAG3) expression was observed on Tcon co-cultured with PHF19-OE vs control MM cells. There were elevated IL-10 and TGFβ1 levels in the culture supernatants of PHF19-OE MM cells, alone and in co-cultures, and antibodies to these cytokines partially neutralized the Treg inhibition of Tcon proliferation triggered by PHF19-OE MM cells. Thus, PHF19 seems to be important in facilitating the crosstalk between MM cells and immune cells in the BM. CD38 expression on the MM cell surface is commonly targeted in immunotherapy. However, CD38 expression was downregulated on PHF19-OE vs -KD MM cells, and PHF19 mRNA expression was negatively correlated to CD38 expression in patient MM cells (Spearman's ρ = -0.38 and -0.2 for GSE5900 and GSE31161, P < .004). As expected, PHF19-OE MM cells were less susceptible than PHF19-KD MM cells to in vitro NK-mediated lysis induced by daratumumab (dara) or isatuximab, which target CD38, as evidenced by fewer CD107a+ and IFN γ+ NK effector cells. Moreover, dara-induced cytotoxicity was diminished in xenografted NSG mice with PHF19-OE vs control cells and reconstituted with human NK cells. These resistant PHF19-OE AMO1 tumors had lower expression of CD38, STAT1, and IFN-related genes, which produced higher levels of human κ light chain, soluble BCMA, and TGFβ1 in matched serum samples. Accordingly, PHF19-OE resulted in significantly decreased mouse survival. To find the mediators of the immunosuppression induced by PHF19, we used ATAC-seq and CHIP-seq analysis in MM cell lines. We found that a number of genes essential for T cell-mediated tumor immunity was downregulated in the PHF19 OE group vs control, including key genes in the interferon-γ (IFN-γ) signaling pathway, which is a pathway that leads to cytokine-mediated cell death. Among the genes of the IFN-γ pathway, 56 genes had less chromatin accessibility in PHF19 OE vs control cells. RNA-seq analysis confirmed that PHF19 OE repressed the expression of CD38 and the IFN-γ and IFN-α signaling pathway. Furthermore, PHF19 OE altered the expression of genes in NF-κB signaling triggered by TNF-α signaling pathway, which are associated with resistance to immunotherapy. Finally, activation of the PI3K/AKT pathway was also identified in PHF19 OE cells, which directly promotes MM cell proliferation and survival, as well as enhances resistance to immunotherapy via upregulation of PD-L1 on the MM cell surface. Conclusions: Taken together, these data indicate that PHF19 promotes an immunosuppressive BM milieu by promoting iTreg frequency and the expression of immunosuppressive cytokines, as well as decreasing CD38 expression on MM cells and diminishing their sensitivity to IFN-γ-mediated killing. These results suggest the potential clinical utility of targeting PHF19 to overcome immunosuppression and thereby enhance or restore sensitivity to CD38-targeted therapy in MM.