Anti-PD-L1-based combination immunotherapy has become the first-line treatment for unresectable hepatocellular carcinoma (HCC). However, the objective response rate is lower than 40%, highlighting the need to identify mechanisms of tolerance to immune checkpoint inhibitors and accurate biomarkers of response. Here, we employed next-generation sequencing to analyze HCC samples from 10 patients receiving anti-PD-L1 therapy. Activation of the renin-angiotensin system was elevated in nonresponders compared with responders, and ACE2 expression was significantly downregulated in nonresponders. ACE2 deficiency promoted HCC development and anti-PD-L1 resistance, whereas ACE2 overexpression inhibited HCC progression in immune competent mice. Mass cytometry by time of flight (CyTOF) revealed that ACE2 deficient murine orthotopic tumor tissues featured elevated M2-like tumor-associated macrophages (TAMs), displayed a CCR5+PD-L1+ immunosuppressive phenotype, and exhibited high VEGFα expression. ACE2 downregulated tumor intrinsic CCL5 expression by suppressing NF-κB signaling through the ACE2/angiotensin-(1–7)/Mas receptor axis. The lower CCL5 levels led to reduced activation of the JAK-STAT3 pathway and suppressed PD-L1 and VEGFα expression in macrophages, blocking macrophage infiltration and M2-like polarization. Pharmacological targeting of CCR5 using maraviroc enhanced the tumor suppressive effect of anti-PD-L1 therapy. Together, these findings suggest that activation of the ACE2 axis overcomes the immunosuppressive microenvironment of HCC and may serve as an immunotherapeutic target and predictive biomarker of response to PD-L1 blockade.