Expression of PD-L1, the ligand for T-cell inhibitory receptor PD-1, is one key immunosuppressive mechanism by which cancer avoids eradication by the immune system. Therapeutic use of blocking antibodies to PD-L1 or its receptor PD-1 has produced unparalleled, durable clinical responses, with highest likelihood of response seen in patients whose tumour or immune cells express PD-L1 before therapy. The significance of PD-L1 expression in each cell type has emerged as a central and controversial unknown in the clinical development of immunotherapeutics. Using genetic deletion in preclinical mouse models, here we show that PD-L1 from disparate cellular sources, including tumour cells, myeloid or other immune cells can similarly modulate the degree of cytotoxic T-cell function and activity in the tumour microenvironment. PD-L1 expression in both the host and tumour compartment contribute to immune suppression in a non-redundant fashion, suggesting that both sources could be predictive of sensitivity to therapeutic agents targeting the PD-L1/PD-1 axis.