Tumor interferon (IFN) signaling promotes PD-L1 expression to suppress T cell-mediated immunosurveillance. We identify the IFN-stimulated non-coding RNA 1 (INCR1) as a long noncoding RNA (lncRNA) transcribed from the PD-L1 locus and show that INCR1 controls IFNγ signaling in multiple tumor types. Silencing INCR1 decreases the expression of PD-L1, JAK2, and several other IFNγ-stimulated genes. INCR1 knockdown sensitizes tumor cells to cytotoxic T cell-mediated killing, improving CAR T cell therapy. We discover that PD-L1 and JAK2 transcripts are negatively regulated by binding to HNRNPH1, a nuclear ribonucleoprotein. The primary transcript of INCR1 binds HNRNPH1 to block its inhibitory effects on the neighboring genes PD-L1 and JAK2, enabling their expression. These findings introduce a mechanism of tumor IFNγ signaling regulation mediated by the lncRNA INCR1 and suggest a therapeutic target for cancer immunotherapy.