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Transforming growth factor beta (TGFβ) and programmed death-ligand 1 (PD-L1) are often overproduced in refractory squamous cell carcinoma (SCC). We examined spatial patterns of PD-L1+ cells in mouse and human SCCs and found that PD-L1 was primarily expressed on infiltrating leukocytes. Although combined TGFβ and PD-L1 blockade are undergoing cancer clinical trials, there are no predictive markers for therapeutic responders. To address this, we used both a small molecule TGFβ inhibitor in combination with anti-PD-L1 and a bifunctional fusion protein targeting both TGFβ and PD-L1 to treat mouse SCCs and found TGFβ inhibition enhanced PD-L1 blockade-induced tumor eradication in multiple tumor models. Furthermore, we identified distinct cell populations of responders and non-responders to bintrafusp alfa, with responders showing a shift toward a more immune-permissive microenvironment. The cellular and molecular signatures of responders versus non-responders to combined TGFβ and PD-L1 blockade provide important insights into future personalized immunotherapy in SCC.