Immune therapies have significantly improved outcomes for cancer patients with poor prognosis, but mechanisms that underlie response or resistance to therapy remain elusive. Inflammatory cytokines such as interferon-gamma (IFNG) augment immune function yet also promote T cell exhaustion through inhibitory ligands such as PDL1. How these opposing effects are integrated in the tumor microenvironment is unclear. We show that while inhibiting tumor IFNG signaling decreases interferon-stimulated genes (ISGs) in cancer cells, it increases ISGs in immune cells by enhancing IFNG produced by exhausted T cells (TEX). In tumors with favorable antigenicity, these TEX mediate rejection. In tumors with neoantigen or MHC-I loss, TEX instead utilize IFNG to drive maturation of innate immune cells, promoting tumor clearance. Thus, interferon signaling in cancer cells and immune cells oppose each other to establish a regulatory relationship that limits both adaptive and innate immune killing. In melanoma and lung cancer patients, perturbation of this relationship is associated with response to immune checkpoint blockade independent of tumor mutational burden. In addition to these suppressive mechanisms, tumor infiltration and antigen loss are common mechanisms that limit effectiveness of T cell responses in solid tumors, in particular chimeric antigen (CAR) T cells. Delivery of pattern recognition receptor agonists is one strategy to improve immune infiltration and prime adaptive immunity; however, targeting these agonists to immune cells is challenging, and off-target signaling in cancer cells can be detrimental as described above. Here, we engineer murine CAR-T cells to deliver RN7SL1, an endogenous RNA that activates RIG-I/MDA5-dependent interferon signaling. RN7SL1 is deployed in extracellular vesicles and preferentially transferred to intratumoral immune cells. Unlike other RNA agonists, RN7SL1 restricts development of myeloid-derived suppressor cells and decreases TGFB expression. In dendritic cells, it fosters DC subsets with anti-viral and costimulatory features. Consequently, endogenous effector-memory CD8 T cells expand, while exhausted T cells contract. Armed with the ability to activate endogenous immune responses, these CAR-T cells effectively reject solid tumors and tumors with CAR antigen loss by drawing on our insights into tumor resistance mechanisms.