Interleukin-37b (hereafter called IL-37) was identified as fundamental inhibitor of natural and acquired immunity. The molecular mechanism and function of IL-37 in colorectal cancer (CRC) has been elusive. Here, we found that IL-37 transgenic (IL-37tg) mice were highly susceptible to colitis-associated colorectal cancer (CAC) and suffered from dramatically increased tumor burdens in colon. Nevertheless, IL-37 is dispensable for intestinal mutagenesis, and CRC cell proliferation, apoptosis, and migration. Notably, IL-37 dampened protective cytotoxic T cell-mediated immunity in CAC and B16-OVA models. CD8 T cell dysfunction is defined by reduced retention and activation as well as failure to proliferate and produce cytotoxic cytokines in IL-37tg mice, enabling tumor evasion of immune surveillance. The dysfunction led by IL-37 antagonizes IL-18-induced proliferation and effector function of CD8 T cells, which was dependent on SIGIRR (single immunoglobulin interleukin-1 receptor-related protein). Finally, we observed that IL-37 levels were significantly increased in CRC patients, and positively correlated with serum CRC biomarker CEA levels, but negatively correlated with the CD8 T cell infiltration in CRC patients. Our findings highlight the role of IL-37 in harnessing antitumor immunity by inactivation of cytotoxic T cells and establish a new defined inhibitory factor IL-37/SIGIRR in cancer-immunity cycle as therapeutic targets in CRC.