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Abstract Background Lung cancer remains one of the most prevalent cancer types worldwide, with a high mortality rate. Upregulation of programmed cell death protein 1 (PD-1) and its ligand (PD-L1) may represent a key mechanism for evading immune surveillance. Immune checkpoint blockade (ICB) antibodies against PD-1 or PD-L1 are therefore widely used to treat patients with lung cancer. However, the mechanisms by which lung cancer and neutrophils in the microenvironment sustain PD-L1 expression and impart stronger inhibition of CD8+ T cell function remain unclear. Methods We investigated the role and underlying mechanism by which PD-L1+ lung cancer and PD-L1+ neutrophils impede the function of CD8+ T cells through magnetic bead cell sorting, quantitative real-time polymerase chain reaction (RT-PCR), western blotting, enzyme-linked immunosorbent assays, confocal immunofluorescence, gene silencing, flow cytometry, etc. In vivo efficacy and safety studies were conducted using (Non-obeseDiabetes/severe combined immune deficiency) SCID/NOD mice. Additionally, we collected clinical and prognostic data from 208 patients who underwent curative lung cancer resection between 2017 and 2018. Results We demonstrated that C-X-C motif chemokine ligand 5 (CXCL5) is markedly overexpressed in lung cancer cells and is positively correlated with a poor prognosis in patients with lung cancer. Mechanistically, CXCL5 activates the phosphorylation of the Paxillin/AKT signaling cascade, leading to upregulation of PD-L1 expression and the formation of a positive feedback loop. Moreover, CXCL5 attracts neutrophils, compromising CD8+ T cell-dependent antitumor immunity. These PD-L1+ neutrophils aggravate CD8+ T cell exhaustion following lung cancer domestication. Combined treatment with anti-CXCL5 and anti-PD-L1 antibodies significantly inhibits tumor growth in vivo. Conclusions Our findings collectively demonstrate that CXCL5 promotes immune escape through PD-L1 upregulation in lung cancer and neutrophils chemotaxis through autocrine and paracrine mechanisms. CXCL5 may serve as a potential therapeutic target in synergy with ICBs in lung cancer immunotherapy.