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Interaction of malignancies with tissue-specific immune cells has gained interest for prognosis and intervention of emerging immunotherapies. We analyzed bone marrow T cells (bmT) as tumor-infiltrating lymphocytes in pediatric precursor-B cell acute lymphoblastic leukemia (ALL). Based on data from 100 patients, we show that ALL is associated with late-stage CD4+ phenotype and loss of early CD8+ T cells. The inhibitory exhaustion marker TIM-3 on CD4+ bmT increased relapse risk (RFS = 94.6/70.3%) confirmed by multivariate analysis. The hazard ratio of TIM-3 expression nearly reached the hazard ratio of MRD (7.1 vs. 8.0) indicating that patients with a high frequency of TIM-3+CD4+ bone marrow T cells at initial diagnosis have a 7.1-fold increased risk to develop ALL relapse. Comparison of wild type primary T cells to CRISPR/Cas9-mediated TIM-3 knockout and TIM-3 overexpression confirmed the negative effect of TIM-3 on T cell responses against ALL. TIM-3+CD4+ bmT are increased in ALL overexpressing CD200, that leads to dysfunctional antileukemic T cell responses. In conclusion, TIM-3-mediated interaction between bmT and leukemia cells is shown as a strong risk factor for relapse in pediatric B-lineage ALL. CD200/TIM-3-signaling, rather than PD-1/PD-L1, is uncovered as a mechanism of T cell dysfunction in ALL with major implication for future immunotherapies.