To determine the activity of pembrolizumab as neoadjuvant immunotherapy before radical cystectomy (RC) for muscle-invasive bladder carcinoma (MIBC) for which standard cisplatin-based chemotherapy is poorly used. In the PURE-01 study, patients had a predominant urothelial carcinoma histology and clinical (c)T≤3bN0 stage tumor. They received three cycles of pembrolizumab 200 mg every 3 weeks before RC. The primary end point in the intention-to-treat population was pathologic complete response (pT0). Biomarker analyses included programmed death-ligand 1 (PD-L1) expression using the combined positive score (CPS; Dako 22C3 pharmDx assay), genomic sequencing (FoundationONE assay), and an immune gene expression assay. Fifty patients were enrolled from February 2017 to March 2018. Twenty-seven patients (54%) had cT3 tumor, 21 (42%) cT2 tumor, and two (4%) cT2-3N1 tumor. One patient (2%) experienced a grade 3 transaminase increase and discontinued pembrolizumab. All patients underwent RC; there were 21 patients with pT0 (42%; 95% CI, 28.2% to 56.8%). As a secondary end point, downstaging to pT<2 was achieved in 27 patients (54%; 95% CI, 39.3% to 68.2%). In 54.3% of patients with PD-L1 CPS ≥ 10% (n = 35), RC indicated pT0, whereas RC indicated pT0 in only 13.3% of those with CPS < 10% (n = 15). A significant nonlinear association between tumor mutation burden (TMB) and pT0 was observed, with a cutoff at 15 mutations/Mb. Expression of several genes in pretherapy lesions was significantly different between pT0 and non-pT0 cohorts. Significant post-therapy changes in the TMB and evidence of adaptive mechanisms of immune resistance were observed in residual tumors. Neoadjuvant pembrolizumab resulted in 42% of patients with pT0 and was safely administered in patients with MIBC. This study indicates that pembrolizumab could be a worthwhile neoadjuvant therapy for the treatment of MIBC when limited to patients with PD-L1-positive or high-TMB tumors.