Chimeric antigen receptor T (CAR T) cell immunotherapy is successful at treating many cancers. However, it often induces life-threatening cytokine release syndrome (CRS) and neurotoxicity. Here, we show that in situ conjugation of polyethylene glycol (PEG) to the surface of CAR T cells ('PEGylation') creates a polymeric spacer that blocks cell-to-cell interactions between CAR T cells, tumour cells and monocytes. Such blockage hinders intensive tumour lysing and monocyte activation by CAR T cells and, consequently, decreases the secretion of toxic cytokines and alleviates CRS-related symptoms. Over time, the slow expansion of CAR T cells decreases PEG surface density and restores CAR T cell-tumour-cell interactions to induce potent tumour killing. This occurs before the restoration of CAR T cell-monocyte interactions, opening a therapeutic window for tumour killing by CAR T cells before monocyte overactivation. Lethal neurotoxicity is also lower when compared with treatment with the therapeutic antibody tocilizumab, demonstrating that in situ PEGylation of CAR T cells provides a materials-based strategy for safer cellular immunotherapy.