<jats:title>Abstract</jats:title> <jats:sec> <jats:title /> <jats:p>Sequence alterations in microsatellites and an elevated mutational burden are observed in 20% of gastric cancers and associated with clinical response to anti–PD-1 antibodies. However, 50% of microsatellite instability–high (MSI-H) cancers are intrinsically resistant to PD-1 therapies. We conducted a phase II trial of pembrolizumab in patients with advanced MSI-H gastric cancer and included serial and multi-region tissue samples in addition to serial peripheral blood analyses. The number of whole-exome sequencing (WES)–derived nonsynonymous mutations correlated with antitumor activity and prolonged progression-free survival (PFS). Coupling WES to single-cell RNA sequencing, we identified dynamic tumor evolution with greater on-treatment collapse of mutational architecture in responders. Diverse T-cell receptor repertoire was associated with longer PFS to pembrolizumab. In addition, an increase in PD-1+ CD8+ T cells correlated with durable clinical benefit. Our findings highlight the genomic, immunologic, and clinical outcome heterogeneity within MSI-H gastric cancer and may inform development of strategies to enhance responsiveness.</jats:p> </jats:sec> <jats:sec> <jats:title>Significance:</jats:title> <jats:p>This study highlights response heterogeneity within MSI-H gastric cancer treated with pembrolizumab monotherapy and underscores the potential for extended baseline and early on-treatment biomarker analyses to identify responders. The observed markers of intrinsic resistance have implications for patient stratification to inform novel combinations among patients with intrinsically resistant features.</jats:p> <jats:p>See related commentary by Fontana and Smyth, p. 2126.</jats:p> <jats:p>This article is highlighted in the In This Issue feature, p. 2113</jats:p> </jats:sec>