PD-1 blockade unleashes the potent antitumor activity of CD8 cells but can also promote immunosuppressive T regulatory (Treg) cells, which may worsen response to immunotherapy. Tumor Treg inhibition is a promising strategy to overcome therapeutic resistance; however, the mechanisms supporting tumor Tregs during PD-1 immunotherapy are largely unexplored. Here, we report that PD-1 blockade increases tumor Tregs in mouse models of immunogenic tumors, including melanoma, and metastatic melanoma patients. Unexpectedly, Treg accumulation was not caused by Treg-intrinsic inhibition of PD-1 signaling but instead depended on an indirect effect of activated CD8 cells. CD8 cells colocalized with Tregs within tumors and produced IL-2, especially after PD-1 immunotherapy. IL-2 upregulated the anti-apoptotic protein ICOS on tumor Tregs, causing their accumulation. ICOS signaling inhibition before PD-1 immunotherapy resulted in increased control of immunogenic melanoma. Thus, interrupting the intratumor CD8:Treg crosstalk is a novel strategy that may enhance the efficacy of immunotherapy in patients.