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Antibodies targeting immune checkpoints are emerging as potent and viable cancer therapies, but not all patients respond to these as single agents. Concurrently targeting additional immunosuppressive pathways is a promising approach to enhance immune checkpoint blockade, and bifunctional molecules designed to target two pathways simultaneously may provide a strategic advantage over the combination of two single agents. M7824 (MSB0011359C) is a bifunctional fusion protein composed of a monoclonal antibody against programmed death ligand 1 (PD-L1) fused to the extracellular domain of human transforming growth factor–β (TGF-β) receptor II, which functions as a “trap” for all three TGF-β isoforms. We demonstrate that M7824 efficiently, specifically, and simultaneously binds PD-L1 and TGF-β. In syngeneic mouse models, M7824 suppressed tumor growth and metastasis more effectively than treatment with either an anti–PD-L1 antibody or TGF-β trap alone; furthermore, M7824 extended survival and conferred long-term protective antitumor immunity. Mechanistically, the dual anti-immunosuppressive function of M7824 resulted in activation of both the innate and adaptive immune systems, which contributed to M7824’s antitumor activity. Finally, M7824 was an effective combination partner for radiotherapy or chemotherapy in mouse models. Collectively, our preclinical data demonstrate that simultaneous blockade of the PD-L1 and TGF-β pathways by M7824 elicits potent and superior antitumor activity relative to monotherapies.