Background <p>CD74 upregulation on tumour-associated macrophages (TAMs) limits phagocytosis. However, the effect of CD74⁺TAMs on adaptive immunity in gastric cancer remains obscure.</p> Methods <p>The study enrolled four cohorts, consisting of two tumor microarrays of patients with gastric cancer from Zhongshan Hospital (448 undergoing curative surgeries, 46 treated with ICI plus palliative chemotherapy), 269 transcriptional data from The Cancer Genome Atlas, and 43 transcriptional data from Korean patients treated with pembrolizumab. CD74⁺TAMs gene signature was directly acquired from public datasets, and we also detected CD74⁺TAMs infiltration on tumor microarray by immunofluorescence. Finally, the associations of CD74⁺TAMs with clinical outcomes and genomic features were analyzed. In vitro culture of fresh tumor tissue was performed to evaluate the potential therapeutic effect of blocking PD-1 in gastric cancer.</p> Results <p>Increased level of CD74⁺TAMs indicates poor clinical outcome in patients with resectable gastric cancer. In advanced gastric cancer, high CD74⁺TAMs infiltration was associated with better response to ICI. CD74⁺TAMs fostered an immunosuppressive microenvironment by expressing PD-L1. Blockade of PD-1 increases anti-tumor immunity in CD74⁺TAMs^high tumours.</p> Conclusions <p>CD74⁺TAMs infiltration is a prognostic factor for prognosis in patients with resectable gastric cancer and a predictor for response to ICI in patients with advanced gastric cancer. CD74⁺TAMs contribute to the immunosuppressive microenvironment by expressing PD-L1 in gastric cancer. CD74⁺TAMs infiltration is a potential predictor for response to ICI in gastric cancer.</p>