PD-1/PD-L1 blockade can promote robust tumor regression yet secondary resistance often occurs as immune selective pressure drives outgrowth of resistant tumor clones. Here using a genome-wide CRISPR screen in B16.SIY melanoma cells, we confirm Ifngr2 and Jak1 as important genes conferring sensitivity to T cell-mediated killing in vitro. However, when implanted into mice, these Ifngr2- and Jak1-deficient tumors paradoxically are better controlled immunologically. This phenotype maps to defective PD-L1 upregulation on mutant tumor cells, which improves anti-tumor efficacy of CD8+ T cells. To reconcile these observations with clinical reports of anti-PD-1 resistance linked to emergence of IFN-γ signaling mutants, we show that when mixed with wild-type tumor cells, IFN-γ-insensitive tumor cells indeed grow out, which depends upon PD-L1 expression by wild-type cells. Our results illustrate the complexity of functions for IFN-γ in anti-tumor immunity and demonstrate that intratumor heterogeneity and clonal cooperation can contribute to immunotherapy resistance.