Abstract BCR-ABL1 fusion gene is the hall marker of chronic myeloid leukemia (CML). Currently, the immune microenvironment of BCRABL1 CML remains largely unexplored. Our recent investigation in a transgenic mouse model of BCRABL1 CML revealed a continuous increase in CD11b+Ly6Cint PMN-MDSC with the progression of the disease. Concurrently, there was an increase in CD11b+Ly6Chigh M-MDSC and F4/80+ macrophages. However, The levels of CD4+ T cells, CD8+ T cells, CD19+ B cells, and CD49b+ NK cells, which are essential for tumor-killing significantly decreased. This immune phenotype was consistently observed in both primary leukemia induction and following serial transplantation of cells from primary leukemic mice. Intriguingly, only recipient mice subjected to sublethal irradiation developed the disease, while mice with intact immune system remained disease-free, which underscores the vital role of the immune system in the development of CML. The predominant presence of CD11b+Ly6Cint PMN-MDSC in the peripheral blood, bone marrow and spleen implies these cells may be at least partially consisted of CML leukemia cells. To examine the hypothesis, qRT-PCR and immunofluorescence (IF) staining were conducted. In both assays, Ly6G+ cells from BCRABL1 mice coexpressed the BCRABL1 oncogene. Furthermore, when co-cultured with CD4 T cells, the division of T cells was significantly inhibited, implying immune suppression by the Ly6G+ PMN-MDSCs and/or CML leukemia cells. In addition, the immuosuppressive pathway genes including Arg1, Hif1a, Enptd1, TGFβ were significantly upregulated. To investigate the possible role of the PD1/PDL1 axis in the BCRABL1 model, flow cytometry analysis was conducted. Unexpectedly, PDL1 was barely expressed in CML leukemia cells, whereas the expression of PDL1 in M-MDSCs and macrophages significantly increased, accompanied by remarkable upregulation of PD1 expression on CD4 T cells and CD8 T cells during leukemia progression. In other words, PDL1 expression on macrophages, rather than leukemia cells, was found to induce T cell exhaustion. For translational purpose, mice transplanted with the primary CML leukemia cells were treated with chemotherapy drugs ponatinib alone or in combination with the anti-PD1 antibody. Compared with the chemotherapy alone group, the mice in the combinational therapy group exhibited rapid remission and better disease control. Most importantly, the disease relapse occurred at a slower rate after treatment discontinuation, suggesting the value of combinational therapy in achieving treatment free remission. In summary, our study not only revealed the dynamic changes of immune microenvironment in the BCRABL1 CML mouse model, but also revealed the different mechanisms underlying immune evasion of BCR-ABL1 CML leukemia cells, which sheds light on a combinational treatment for achieving the treatment free remission of CML. Citation Format: Xiaocui Lu, Hui Fang, Xuexiu Fang, Atsuko Matsunaga, Kebin Liu, Jorge Cortes, John K. Cowell, Tianxiang Hu. Macrophage instead of leukemia cell expressed PD-L1 drives T cell exhaustion and immune evasion of BCRABL1 chronic myeloid leukemia [abstract]. In: Proceedings of the American Association for Cancer Research Annual Meeting 2024; Part 1 (Regular Abstracts); 2024 Apr 5-10; San Diego, CA. Philadelphia (PA): AACR; Cancer Res 2024;84(6_Suppl):Abstract nr 187.