Tumor cells evade the immune surveillance by up-regulating surface expression of PD-L1, which interacts with PD-1 on T cells to elicit the immune checkpoint response 1,2 . Anti-PD-1 antibodies have shown remarkable promise in treating tumors, including metastatic melanoma 2–4 . However, patient response rate is low 4,5 . A better understanding of PD-L1-mediated immune evasion is needed to predict patient response and improve treatment efficacy. Here we report that metastatic melanoma releases a high level of extracellular vesicles (EVs), mostly in the form of exosomes, that carry PD-L1 on their surface. Interferon-γ (IFN-γ) up-regulates PD-L1 on these vesicles, which suppresses the function of CD8 T cells and facilitates tumor growth. In patients with metastatic melanoma, the level of circulating exosomal PD-L1 positively correlates with that of IFN-γ, and changes during the course of anti-PD-1 therapy. The magnitudes of the early on-treatment increase in circulating exosomal PD-L1, as an indicator of the adaptive response of the tumor cells to T cell re-invigoration, stratifies clinical responders from non-responders. Our study unveils a mechanism by which tumor cells systemically suppress the immune system, and provides a rationale for the application of exosomal PD-L1 as a predictor for anti-PD-1 therapy.