INTRODUCTION: Cadonilimab (AK104) is a first-in-class tetravalent bispecific antibody that targets both PD-1 and CTLA-4, showing a manageable safety profile and favorable clinical benefits. This study aimed to identify the biomarkers of clinical response and explore the immune response within the tumor microenvironment upon the AK104 therapy in advanced solid tumors. MATERIAL AND METHODS: Gene expression profiles of paired pre- and post-treatment tumor tissues from twenty-one patients were analyzed. The association of gene expression levels with either clinical efficacy or prognosis was evaluated and subsequently validated with published datasets using log-rank for Kaplan-Meier estimates. Comparative immune profile analyses of tumor microenvironment before and after AK104 treatment were conducted. The visualization of tumor-infiltrating lymphocytes was performed using multiplex immunohistochemistry. The predictive value of CD74 was further validated with protein expression by immunohistochemistry. RESULTS: Baseline CD74 gene expression was associated with favorable patient outcomes (overall survival [OS], HR = 0.33, 95% CI 0.11-1.03, p = 0.0463), which was further confirmed with the published datasets. Tumors with high CD74 gene expression at baseline were more likely to exhibit an immune-inflamed microenvironment. AK104 efficiently enhanced the infiltration of immune cells in the tumor microenvironment. Additionally, high CD74 protein expression (≥ 10% of the tumor area occupied by CD74 stained immune cells) at baseline was associated with better progressive-free survival (HR = 0.21, 95% CI 0.06-0.68, p = 0.0065) and OS (HR = 0.35, 95% CI 0.12-1.08, p = 0.0615). CONCLUSIONS: Our findings demonstrate that CD74 is a promising predictive biomarker for AK104 therapeutic response in advanced solid tumors. Trial registration number NCT03261011.