© The Author(s) 2016. Combination therapy with α-CTLA-4 and α-PD-1 has shown significant clinical responses in different types of cancer. However, the underlying mechanisms remain elusive. Here, combining detailed analysis of human tumour samples with preclinical tumour models, we report that concomitant blockade of CTLA-4 and PD-1 improves anti-tumour immune responses and synergistically eradicates tumour. Mechanistically, combination therapy relies on the interdependence between IL-7 and IFN-γ signalling in T cells, as lack of either pathway abrogates the immune-boosting and therapeutic effects of combination therapy. Combination treatment increases IL-7Rα expression on tumour-infiltrating T cells in an IFN-γ/IFN-γR signalling-dependent manner, which may serve as a potential biomarker for clinical trials with immune checkpoint blockade. Our data suggest that combining immune checkpoint blockade with IL-7 signalling could be an effective modality to improve immunotherapeutic efficacy. Taken together, we conclude that combination therapy potently reverses immunosuppression and eradicates tumours via an intricate interplay between IFN-γ/IFN-γR and IL-7/IL-7R pathways.