The CD33-targeting bispecific T-cell engager (BiTE) AMG 330 proved to be highly efficient in mediating cytolysis of acute myeloid leukemia (AML) cells in vitro and in mouse models. Yet, T-cell activation is correlated with upregulation of programmed cell death-ligand 1 (PD-L1) and other inhibitory checkpoints on AML cells that confer adaptive immune resistance. PD-1 and PD-L1 blocking agents may counteract T-cell dysfunction, however, at the expense of broadly distributed immune-related adverse events (irAEs). We developed a bifunctional checkpoint inhibitory T cell-engaging (CiTE) antibody that combines T-cell redirection to CD33 on AML cells with locally restricted immune checkpoint blockade. This is accomplished by fusing the extracellular domain of PD-1 (PD-1(ex)), which naturally holds a low affinity to PD-L1, to an alpha CD3. alpha CD33 BiTE-like scaffold. By a synergistic effect of checkpoint blockade and avidity-dependent binding, the PD-1(ex) attachment increases T-cell activation (3.3-fold elevation of interferon-g) and leads to efficient and highly selective cytotoxicity against CD33(+)PD-L1(+) cell lines (50% effective concentration 5 2.3-26.9 pM) as well as patient-derived AML cells (n = 8). In a murine xenograft model, the CiTE induces complete AML eradication without initial signs of irAEs as measured by body weight loss. We conclude that our molecule preferentially targets AML cells, whereas high-affinity blockers, such as clinically approved anticancer agents, also address PD-L1(+) non-AML cells. By combining the high efficacy of T-cell engagers with immune checkpoint blockade in a single molecule, we expect to minimize irAEs associated with the systemic application of immune checkpoint inhibitors and suggest high therapeutic potential, particularly for patients with relapsed/refractory AML.