Pancreatic cancer is a highly aggressive, treatment refractory disease and is the fourth leading cause of death in the United States. In humans, 90% of pancreatic adenocarcinomas over-express altered forms of a tumor-associated antigen, MUC1 (an epithelial mucin glycoprotein), which is a target for immunotherapy. Using a clinically relevant mouse model of pancreas cancer that demonstrates peripheral and central tolerance to human MUC1 and develops spontaneous tumors of the pancreas, we have previously reported the presence of functionally active, low affinity, MUC1-specific precursor cytotoxic T cells (pCTLs). Hypothesis for this study is that MUC1-based immunization may enhance the low level MUC1-specific immunity that may lead to an effective anti-tumor response. Data demonstrate that MUC1 peptide-based immunization elicits mature MUC1-specific CTLs in the peripheral lymphoid organs. The mature CTLs secrete IFN-gamma and are cytolytic against MUC1-expressing tumor cells in vitro. However, active CTLs that infiltrate the pancreas tumor microenvironment become cytolytically anergic and are tolerized to MUC1 antigen, allowing the tumor to grow. We demonstrate that the CTL tolerance could be reversed at least in vitro with the use of anti-CD40 co-stimulation. The pancreas tumor cells secrete immunosuppressive cytokines, including IL-10 and TGF-beta that are partly responsible for the down-regulation of CTL activity. In addition, they down-regulate their MHC class I molecules to avoid immune recognition. CD4+ CD25+ T regulatory cells, which secrete IL-10, were also found in the tumor environment. Together these data indicate the use of several immune evasion mechanisms by tumor cells to evade CTL killing. Thus altering the tumor microenvironment to make it more conducive to CTL killing may be key in developing a successful anti-cancer immunotherapy.