Lymphocyte activation relies on the integration of signals from multiple receptors at cell-cell contacts, but the spatiotemporal regulation of this process is unclear. Here, we show that programmed cell death protein 1 (PD-1) and T cell receptor (TCR) signals are integrated at nanoscale microvillar close contacts formed during T cell interactions with their targets. PD-1 signaling begins as these contacts form and selectively limits the duration, but not the amplitude, of TCR signaling. PD-1 suppresses TCR activity directly, by locally recruiting Src homology 2 domain-containing protein tyrosine phosphatase-2 (SHP2), and indirectly, by reducing cell-spreading, close-contact formation, and TCR engagement. A PD-1 blocking antibody induced inhibitory signaling when Fc receptor engagement trapped PD-1 at close contacts. Engineering the antibody to prevent PD-1 trapping eliminated these agonistic effects and improved blockade efficacy. These findings identify microvillar contacts as crucial hubs of initial signal integration and provide a framework for optimizing checkpoint immunotherapies.