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Patients with smoldering multiple myeloma (SMM) are observed until progression, but early treatment may improve outcomes. We conducted a phase II trial of elotuzumab, lenalidomide, and dexamethasone (EloLenDex) in patients with high-risk SMM and performed single-cell RNA and T cell receptor (TCR) sequencing on 149 bone marrow (BM) and peripheral blood (PB) samples from patients and healthy donors (HDs). We find that early treatment with EloLenDex is safe and effective and provide a comprehensive characterization of alterations in immune cell composition and TCR repertoire diversity in patients. We show that the similarity of a patient's immune cell composition to that of HDs may have prognostic relevance at diagnosis and after treatment and that the abundance of granzyme K (GZMK) CD8 effector memory T (TEM) cells may be associated with treatment response. Last, we uncover similarities between immune alterations observed in the BM and PB, suggesting that PB-based immune profiling may have diagnostic and prognostic utility.