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The programmed cell death protein 1 (PD-1) plays a critical role in cancer immune evasion. Blocking the PD-1-PD-L1 interaction by monoclonal antibodies has shown remarkable clinical efficacy in treating certain types of cancer. However, antibodies are costly to produce, and antibody-based therapies can cause immune-related adverse events. To address the limitations associated with current PD-1/PD-L1 blockade immunotherapy, we aimed to develop peptide-based inhibitors of the PD-1/PD-L1 interaction as an alternative means to PD-1/PD-L1 blockade antibodies for anti-cancer immunotherapy. Through the functional screening of peptide arrays encompassing the ectodomains of PD-1 and PD-L1, followed by the optimization of the hit peptides for solubility and stability, we have identified a 16-mer peptide, named mL7N, with a remarkable efficacy in blocking the PD-1/PD-L1 interaction both in vitro and in vivo. The mL7N peptide effectively rejuvenated PD-1-suppressed T cells in multiple cellular systems designed to recapitulate the PD-1/PD-L1 interaction in the context of T-cell receptor signaling. Furthermore, PA-mL7N, a chimera of the mL7N peptide coupled to albumin-binding palmitic acid (PA), significantly promoted breast cancer cell killing by peripheral blood mononuclear cells ex vivo and significantly curbed tumor growth in a syngeneic mouse model of breast cancer. Our work raises the prospect that mL7N may serve as a prototype for the development of a new line of peptide-based immunomodulators targeting the PD-1/PD-L1 immune checkpoint with potential applications in cancer treatment.