The antitumor efficacy of cancer immunotherapy can correlate with the presence of certain bacterial species within the gut microbiome. However, many of the molecular mechanisms that influence host response to immunotherapy remain elusive. In this study, we show that members of the bacterial genus improve checkpoint inhibitor immunotherapy in mouse tumor models. Active enterococci express and secrete orthologs of the NlpC/p60 peptidoglycan hydrolase SagA that generate immune-active muropeptides. Expression of SagA in nonprotective was sufficient to promote immunotherapy response, and its activity required the peptidoglycan sensor NOD2. Notably, SagA-engineered probiotics or synthetic muropeptides also augmented anti-PD-L1 antitumor efficacy. Taken together, our data suggest that microbiota species with specialized peptidoglycan remodeling activity and muropeptide-based therapeutics may enhance cancer immunotherapy and could be leveraged as next-generation adjuvants.