Although PD-1/PD-L1 inhibitors have transformed cancer immunotherapy, a substantial proportion of patients derive no clinical benefit due to resistance driven by the tumour microenvironment (TME). Transforming growth factor-β (TGF-β) is a key immunosuppressive cytokine implicated in this resistance. Several bifunctional antibodies that co-target PD-1 and TGF-β signalling have entered clinical trials and shown encouraging efficacy, but the mechanistic basis of their synergy is not fully understood. Here, we engineered 015s, a bifunctional fusion antibody that simultaneously targets murine PD-1 and TGF-β and evaluated its antitumour efficacy and mechanistic impact in pre-clinical models. Antibody 015s exhibited high affinity, dual target binding, and the effective inhibition of PD-1 and TGF-β signalling. In vivo, 015s significantly suppressed tumour growth compared with anti-mPD-1 or TGF-β receptor II (TGF-βRII) monotherapy. When combined with the CD24-targeted ADC, 015s produced even greater antitumour activity and achieved complete tumour regression. Mechanistic studies demonstrated that 015s significantly reduced tumour cell migration and invasion, reversed epithelial-mesenchymal transition (EMT), decreased microvascular density, and attenuated collagen deposition within the TME. Antibody 015s also decreased bioactive TGF-β1 and increased intratumoural IFN-γ, creating a more immunostimulatory milieu. These findings support further development of PD-1/TGF-β bifunctional antibodies for cancers with high TGF-β activity or limited response to immune checkpoint blockade.