Cutaneous T cell lymphoma (CTCL) is a disfiguring and incurable disease characterized by skin-homing malignant T cells surrounded by immune cells that promote CTCL growth through an immunosuppressive tumor microenvironment (TME). Preliminary data from our phase I clinical trial of anti-programmed cell death ligand 1 (anti-PD-L1) combined with lenalidomide in patients with relapsed/refractory CTCL demonstrated promising clinical efficacy. In the current study, we analyzed the CTCL TME, which revealed a predominant PD-1+ M2-like tumor-associated macrophage (TAM) subtype with upregulated NF-κB and JAK/STAT signaling pathways and an aberrant cytokine and chemokine profile. Our in vitro studies investigated the effects of anti-PD-L1 and lenalidomide on PD-1+ M2-like TAMs. The combinatorial treatment synergistically induced functional transformation of PD-1+ M2-like TAMs toward a proinflammatory M1-like phenotype that gained phagocytic activity upon NF-κB and JAK/STAT inhibition, altered their migration through chemokine receptor alterations, and stimulated effector T cell proliferation. Lenalidomide was more effective than anti-PD-L1 in downregulation of the immunosuppressive IL-10, leading to decreased expression of both PD-1 and PD-L1. Overall, PD-1+ M2-like TAMs play an immunosuppressive role in CTCL. Anti-PD-L1 combined with lenalidomide provides a therapeutic strategy to enhance antitumor immunity by targeting PD-1+ M2-like TAMs in the CTCL TME.