In vitro cancer cultures, including three-dimensional organoids, typically contain exclusively neoplastic epithelium but require artificial reconstitution to recapitulate the tumor microenvironment (TME). The co-culture of primary tumor epithelia with endogenous, syngeneic tumor-infiltrating lymphocytes (TILs) as a cohesive unit has been particularly elusive. Here, an air-liquid interface (ALI) method propagated patient-derived organoids (PDOs) from >100 human biopsies or mouse tumors in syngeneic immunocompetent hosts as tumor epithelia with native embedded immune cells (T, B, NK, macrophages). Robust droplet-based, single-cell simultaneous determination of gene expression and immune repertoire indicated that PDO TILs accurately preserved the original tumor T cell receptor (TCR) spectrum. Crucially, human and murine PDOs successfully modeled immune checkpoint blockade (ICB) with anti-PD-1- and/or anti-PD-L1 expanding and activating tumor antigen-specific TILs and eliciting tumor cytotoxicity. Organoid-based propagation of primary tumor epithelium en bloc with endogenous immune stroma should enable immuno-oncology investigations within the TME and facilitate personalized immunotherapy testing.