Fewer than 50% of metastatic deficient mismatch repair (dMMR) colorectal cancer (CRC) patients respond to immune checkpoint inhibition (ICI). Identifying and expanding this patient population remains a pressing clinical need. Here, we report that an interferon-high immunophenotype locally enriched in cytotoxic lymphocytes and antigen-presenting macrophages is required for response. This immunophenotype is not exclusive to dMMR CRCs but comprises a subset of MMR proficient (pMMR) CRCs. Single-cell spatial analysis and in vitro cell co-cultures indicate that interferon-producing cytotoxic T cells induce overexpression of antigen presentation in adjacent macrophages and tumor cells, including MHC class II invariant chain CD74. dMMR CRCs expressing high levels of CD74 respond to ICI and a subset of CD74 high pMMR CRC patients show better progression free survival when treated with ICI. Therefore, CD74 abundance can identify the constitutive interferon-high immunophenotype determining clinical benefit in CRC, independently of tumor mutational burden or MMR status.