Tumours have developed strategies to interfere with most steps required for anti-tumour immune responses. Although many populations contribute to anti-tumour responses, tumour-infiltrating cytotoxic T cells dominate, hence, many suppressive strategies act to inhibit these. Tumour-associated T cells are frequently restricted to stromal zones rather than tumour islands, raising the possibility that the tumour microenvironment, where crosstalk between malignant and “normal” stromal cells exists, may be critical for T cell suppression. We provide evidence of direct interactions between stroma and T cells driving suppression, showing that cancer-associated fibroblasts (CAFs) sample, process and cross-present antigen, killing CD8⁺ T cells in an antigen-specific, antigen-dependent manner via PD-L2 and FASL. Inhibitory ligand expression is observed in CAFs from human tumours, and neutralisation of PD-L2 or FASL reactivates T cell cytotoxic capacity in vitro and in vivo. Thus, CAFs support T cell suppression within the tumour microenvironment by a mechanism dependent on immune checkpoint activation.