BackgroundBispecific antibody has garnered considerable attention in the recent years due to its impressive preliminary efficacy in hematological malignancies. For solid tumors, however, the main hindrance is the suppressive tumor microenvironment, which effectively impedes the activation of infiltrating T cells. Herein, we designed a bispecific antibody AP203 with high binding affinity to PD-L1 and CD137 and assessed its safety and anti-tumor efficacy, as well as explored the mechanism of action.MethodsThe optimal antibody binders against PD-L1 and CD137 were screened from the OmniMab phagemid library. The binding affinity of the constructed AP203 were evaluated using enzyme-linked immunosorbent assay (ELISA) and biolayer interferometry (BLI). T-cell stimulatory capacity was assessed using the allogeneic mixed lymphocyte reaction (MLR), antigen-specific recall response, and coculture with PD-L1-expressing cells. In vivo antitumor efficacy was evaluated using two models of tumor-xenografted humanized mice with profiling of tumor infiltrating lymphocytes (TILs). The possible toxicity of AP203 was examined using in vitro cytokine release assay by human PBMCs.ResultsAP203, which simultaneously targeted PD-L1 and costimulatory CD137, elicit superior agonistic effects over parental antibodies alone or in combination in terms of T cell activation, enhanced memory recall responses, and overcoming Treg-mediated immunosuppression (P < 0.05). The agonistic activity of AP203 was further demonstrated PD-L1-dependent by coculturing T cells with PD-L1-expressing cells. In vivo animal studies using immunodeficient or immunocompetent mice both showed a dose-related antitumor efficacy superior to parental antibodies in combination (P < 0.05). Correspondingly, AP203 significantly increased tumor infiltrating CD8 + T cells, while decreased CD4 + T cells, as well as Treg cells (P < 0.05), resulting in a dose-dependent increase in the CD8 + /CD4 + ratio. Moreover, either soluble or immobilized AP203 did not induce the production of inflammatory cytokines by human PBMCs.ConclusionsAP203 exerts potent antitumor activity not only by blocking PD-1/PD-L1 inhibitory signaling, but also by activating CD137 costimulatory signaling in effector T cells that consequently counteracts Treg-mediated immunosuppression. Based on promising preclinical results, AP203 should be a suitable candidate for clinical treatment of solid tumors.Supplementary InformationThe online version contains supplementary material available at 10.1186/s12967-023-04193-5.