Background Microsatellite instability (MSI) and programmed death-ligand 1 (PD-L1) are candidate predictors for the response to immune checkpoint inhibitors, and may predict chemotherapy sensitivity. We investigated the simultaneous expression of mutL homolog 1 (MLH1), a mismatch repair gene, and PD-L1 in gastric cancers. Methods We examined MLH1 and PD-L1 expression in surgical specimens from 285 gastric cancer patients treated with or without preoperative chemotherapy, and assessed the relation between expression results and both histological response and recurrence-free survival (RFS). Results Of 285 patients, 28 (9.8%) and 70 (24.6%) exhibited negative MLH1 and high PD-L1 expression, respectively. Most MLH1-negative tumors (85.7%) showed high MSI, and these tumors exhibited high PD-L1 expression more frequently than MLH1-positive tumors (57.1% vs. 21.0%, P < 0.001). MLH1-negative patients were significantly less likely to respond to preoperative chemotherapy than MLH1-positive patients (16.7% vs. 61.2%, P = 0.005), whereas there was no significant difference between high-and low-PD-L1 expression patients (55.9% vs. 56.6%, P = 0.95). RFS in patients without preoperative chemotherapy was significantly longer in the MLH1-negative group than in the MLH1-positive group (HR 0.30; 95% CI 0.09-0.95; P = 0.030), whereas in patients with preoperative chemotherapy there was no significant difference in RFS between the two groups (HR 0.70; 95% CI 0.30-1.63; P = 0.41). PD-L1 expression was not associated with RFS in patients with or without chemotherapy. Conclusions Loss of MLH1 was associated with chemoresistance and did not prolong survival following neoadjuvant chemotherapy. The strong association between MLH1 and MSI status suggests that immune checkpoint inhibitors may be preferable to conventional chemotherapy for MLH1-negative gastric cancer.