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Background The CTLA-4 blocking antibody ipilimumab has demonstrated substantial and durable effects in patients with melanoma. While CTLA-4 therapy, both as monotherapy and in combination with PD-1 targeting therapies, has great potential in many indications, the toxicities of the current treatment regimens may limit their use. Thus, there is a medical need for new CTLA-4 targeting therapies with improved benefit-risk profile. Methods ATOR-1015 is a human CTLA-4 x OX40 targeting IgG1 bispecific antibody generated by linking an optimized version of the Ig-like V-type domain of human CD86, a natural CTLA-4 ligand, to an agonistic OX40 antibody. In vitro evaluation of T-cell activation and T regulatory cell (Treg) depletion was performed using purified cells from healthy human donors or cell lines. In vivo anti-tumor responses were studied using human OX40 transgenic (knock-in) mice with established syngeneic tumors. Tumors and spleens from treated mice were analyzed for CD8+ T cell and Treg frequencies, T-cell activation markers and tumor localization using flow cytometry. Results ATOR-1015 induces T-cell activation and Treg depletion in vitro. Treatment with ATOR-1015 reduces tumor growth and improves survival in several syngeneic tumor models, including bladder, colon and pancreas cancer models. It is further demonstrated that ATOR-1015 induces tumor-specific and long-term immunological memory and enhances the response to PD-1 inhibition. Moreover, ATOR-1015 localizes to the tumor area where it reduces the frequency of Tregs and increases the number and activation of CD8+ T cells. Conclusions By targeting CTLA-4 and OX40 simultaneously, ATOR-1015 is directed to the tumor area where it induces enhanced immune activation, and thus has the potential to be a next generation CTLA-4 targeting therapy with improved clinical efficacy and reduced toxicity. ATOR-1015 is also expected to act synergistically with anti-PD-1/PD-L1 therapy. The pre-clinical data support clinical development of ATOR-1015, and a first-in-human trial has started (NCT03782467). Electronic supplementary material The online version of this article (10.1186/s40425-019-0570-8) contains supplementary material, which is available to authorized users.