Patients with smoldering multiple myeloma (SMM) are observed until progression, but early treatment may improve outcomes. We conducted a phase II trial of elotuzumab, lenalidomide, and dexamethasone (EloLenDex) in patients with high-risk SMM and performed single-cell RNA and T cell receptor (TCR) sequencing on 149 bone marrow (BM) and peripheral blood (PB) samples from patients and healthy donors (HDs). We find that early treatment with EloLenDex is safe and effective and provide a comprehensive characterization of alterations in immune cell composition and TCR repertoire diversity in patients. We show that the similarity of a patient’s immune cell composition to that of HDs may have prognostic relevance at diagnosis and after treatment and that the abundance of granzyme K (GZMK)+ CD8+ effector memory T (TEM) cells may be associated with treatment response. Last, we uncover similarities between immune alterations observed in the BM and PB, suggesting that PB-based immune profiling may have diagnostic and prognostic utility. Display omitted •EloLenDex is associated with 4-year PFS of 89% in patients with high-risk SMM•Immune reactivity, post-therapy immune normalization are associated with longer PFS•Higher abundance of GZMK+ cytotoxic T cells is associated with longer PFS•Blood-based immune profiling detects immune dysregulation associated with disease Sklavenitis-Pistofidis et al. report results of a phase II trial of EloLenDex in patients with high-risk smoldering multiple myeloma and use single-cell RNA sequencing to identify biomarkers of outcomes. They show that immune cell composition affects progression-free survival and that blood-based immune profiling can detect immune alterations observed in the bone marrow.