Our bodies are equipped with powerful immune surveillance to clear cancerous cells as they emerge. How tumor-initiating stem cells (tSCs) that form and propagate cancers equip themselves to overcome this barrier remains poorly understood. To tackle this problem, we designed a skin cancer model for squamous cell carcinoma (SCC) that can be effectively challenged by adoptive cytotoxic T cell transfer (ACT)-based immunotherapy. Using single-cell RNA sequencing (RNA-seq) and lineage tracing, we found that transforming growth factor β (TGF-β)-responding tSCs are superior at resisting ACT and form the root of tumor relapse. Probing mechanism, we discovered that during malignancy, tSCs selectively acquire CD80, a surface ligand previously identified on immune cells. Moreover, upon engaging cytotoxic T lymphocyte antigen-4 (CTLA4), CD80-expressing tSCs directly dampen cytotoxic T cell activity. Conversely, upon CTLA4- or TGF-β-blocking immunotherapies or Cd80 ablation, tSCs become vulnerable, diminishing tumor relapse after ACT treatment. Our findings place tSCs at the crux of how immune checkpoint pathways are activated.