Casitas B lymphoma (c-Cbl) is an E3 ubiquitin ligase and a negative regulator of colorectal cancer (CRC). Despite its high expression in immune cells, the effect of c-Cbl on the tumor microenvironment remains poorly understood. Here we demonstrate that c-Cbl alters the tumor microenvironment and suppresses Programmed cell death-1 (PD-1) protein, an immune checkpoint receptor. Using syngeneic CRC xenografts, we observed significantly higher growth of xenografts and infiltrating immune cells in c-Cbl^+/− compared to c-Cbl^+/+ mice. Tumor-associated CD8+ T-lymphocytes and macrophages of c-Cbl^+/− mice showed 2–3-fold higher levels of PD-1. Functionally, macrophages from c-Cbl^+/− mice showed a 4–5-fold reduction in tumor phagocytosis, which was restored with an anti-PD-1 neutralizing antibody suggesting regulation of PD-1 by c-Cbl. Further mechanistic probing revealed that C-terminus of c-Cbl interacted with the cytoplasmic tail of PD-1. c-Cbl destabilized PD-1 through ubiquitination- proteasomal degradation depending on c-Cbl’s RING finger function. This data demonstrates c-Cbl as an E3 ligase of PD-1 and a regulator of tumor microenvironment, both of which were unrecognized components of its tumor suppressive activity. Advancing immune checkpoint and c-Cbl biology, our study prompts for probing of PD-1 regulation by c-Cbl in conditions driven by immune checkpoint abnormalities such as cancers and autoimmune diseases.