Extracellular adenosine in tumors can suppress immune responses and promote tumor growth. Adenosine deaminase 2 (ADA2) converts adenosine into inosine. The role of ADA2 in cancer and whether it can target adenosine for cancer therapy has not been investigated. Here we show that increased ADA2 expression is associated with increased patient survival and enrichment of adaptive immune response pathways in several solid tumor types. Several ADA2 variants were created to improve catalytic efficiency, and PEGylation was used to prolong systemic exposure. In mice, PEGylated ADA2 (PEGADA2) inhibited tumor growth by targeting adenosine in an enzyme activity-dependent manner and thereby modulating immune responses. These findings introduce endogenous ADA2 expression as a prognostic factor and PEGADA2 as a novel immunotherapy for cancer. SIGNIFICANCE: This study identifies ADA2 as a prognostic factor associated with prolonged cancer patient survival and introduces the potential of enzymatic removal of adenosine with engineered ADA2 for cancer immunotherapy.