Compositions and methods of their use to detect and treat anti-PD1 therapy resistance are provided herein. Compositions that immunospecifically bind and deplete dysfunctional T cells are provided. The dysfunctional T cells that are depleted include CD38+PD-1+ T cells, CD38+CD8+ T-cells, or both. The dysfunctional T cells can be depleted, for example, by administering an antibody or fusion protein that specifically binds to dysfunctional T cells and promotes their depletion. In one embodiment the antibody is a bispecific antibody that can be specific for CD38 and CD8, or it can be specific for CD38 and PD-1. Also disclosed is a method of detecting and treating anti-PD1 therapy resistance by measuring the amount of CD38+PD1+CD8 T cells in blood or tissue samples obtained from a subject prior to anti-PD1 therapy and administering an anti-CD38/CD8 or anti-CD38/PD-1 depleting/blocking antibody to the subject prior to anti-PD1 therapy.