Immunity-related GTPase M (IRGM), an Interferon-inducible protein, functions as a pivotal immunoregulator in multiple autoimmune diseases and infection. However, the role of IRGM in hepatocellular carcinoma (HCC) development remains unveiled. Here, we found interferon-γ (IFN-γ) treatment in HCC drastically triggered the expression of IRGM, and the high level of IRGM indicated poor prognosis in HCC patients. Functionally, IRGM promoted the malignant progression of HCC. Single-cell sequencing revealed that IRGM inhibition promoted the infiltration of CD8 cytotoxic T lymphocytes (CTLs) with significant downregulation of PD-L1 expression in HCC. Furthermore, Immunoprecipitation-Mass Spectrometry assay revealed that IRGM interacted with transcription factor YBX1, which facilitated PD-L1 transcription. Mechanistically, IRGM promoted the interaction of YBX1 and phosphokinase S6K1, increasing phosphorylation and nuclear localization of YBX1, transcription of PD-L1. Additionally, the combination of IRGM inhibition with α-PD1 demonstrated a stronger anti-tumor effect compared to the single application of α-PD1. In summary, IRGM is a novel regulator of PD-L1, which suppresses CD8 CTLs infiltration and function in HCC, resulting in cancer progression. This study may raise a novel therapeutic strategy combined with immune checkpoint inhibitors (ICIs) against HCC.