PDL1 blockade produces remarkable clinical responses, thought to occur by T cell reactivation through prevention of PDL1-PD1 T cell inhibitory interactions. Here, we find that PDL1 cell-intrinsic signaling protects cancer cells from interferon (IFN) cytotoxicity and accelerates tumor progression. PDL1 inhibited IFN signal transduction through a conserved class of sequence motifs that mediate crosstalk with IFN signaling. Abrogation of PDL1 expression or antibody-mediated PDL1 blockade strongly sensitized cancer cells to IFN cytotoxicity through a STAT3/caspase-7-dependent pathway. Moreover, somatic mutations found in human carcinomas within these PDL1 sequence motifs disrupted motif regulation, resulting in PDL1 molecules with enhanced protective activities from type I and type II IFN cytotoxicity. Overall, our results reveal a mode of action of PDL1 in cancer cells as a first line of defense against IFN cytotoxicity.