Tumor immune surveillance and cancer immunotherapies are thought to depend on the intratumoral infiltration of activated CD8(+) T cells. Intratumoral CD8(+) T cells are rare and lack activity. IL-10 is thought to contribute to the underlying immune suppressive microenvironment. Defying those expectations we demonstrate that IL-10 induces several essential mechanisms for effective antitumor immune surveillance infiltration and activation of intratumoral tumor-specific cytotoxic CD8(+) T cells, expression of the Th1 cytokine interferon-γ (IFNγ) and granzymes in CD8(+) T cells, and intratumoral antigen presentation molecules. Consequently, tumor immune surveillance is weakened in mice deficient for IL-10 whereas transgenic overexpression of IL-10 protects mice from carcinogenesis. Treatment with pegylated IL-10 restores tumor-specific intratumoral CD8(+) T cell function and controls tumor growth.