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Despite the established use of immune checkpoint inhibitors (ICIs) to treat non-small cell lung cancer (NSCLC), only a subset of patients benefit from treatment and ∼50% of patients whose tumors respond eventually develop acquired resistance (AR). To identify novel drivers of AR, we generated murine Msh2 knock-out (KO) lung tumors that initially responded but eventually developed AR to anti-PD-1, alone or in combination with anti-CTLA-4. Resistant tumors harbored decreased infiltrating T cells and reduced cancer cell-intrinsic MHC-I and MHC-II levels, yet remained responsive to IFNγ. Resistant tumors contained extensive regions of hypoxia, and a hypoxia signature derived from single-cell transcriptional profiling of resistant cancer cells was associated with decreased progression-free survival in a cohort of NSCLC patients treated with anti-PD-1/PD-L1 therapy. Targeting hypoxic tumor regions using a hypoxia-activated pro-drug delayed AR to ICIs in murine Msh2 KO tumors. Thus, this work provides a rationale for targeting tumor metabolic features, such as hypoxia, in combination with immune checkpoint inhibition.