The efficacy of T cell-based immunotherapies is limited by immunosuppressive pressures in the tumor microenvironment (TME). We leveraged single-cell RNA sequencing to deconvolute the TME of Hodgkin lymphoma, an ideal model given the extensive degree of immunosuppressive cell infiltration. Using an algorithm to infer cell-to-cell communication, we identified a predominant role of the interaction between BTLA on effector T cells and HVEM (TNFRSF14) on immunosuppressive cells, such regulatory T cells and tumor-associated monocytes. Correspondingly, we found that high BTLA expression in chimeric antigen receptor (CAR) T cells correlated with poor response to treatment. Therefore, we performed CRISPR-Cas9 knockout of BTLA in CAR T cells and demonstrated improved tumor control and persistence in models of Hodgkin lymphoma, non-Hodgkin lymphoma, and solid malignancies. Overall, our data suggest that the BTLA-HVEM axis is a crucial immune checkpoint in CAR T cell immunotherapy and warrants the use of novel strategies to overcome this barrier.