Background: We previously conducted a phase I/Ib study with regorafenib and nivolumab in patients with refractory metastatic mismatch repair proficient (pMMR) colorectal cancer (CRC). This study aimed to investigate the biomarkers that predict the treatment response. Methods: Out of the 51 patients who received regorafenib and nivolumab, 22 archival pretreatment tumor samples were subjected to the Xerna TME Panel, a machine learning-based RNA-sequencing biomarker assay and were classified into one of four TME biomarker subtypes: Angiogenesis (A), Immune Active (IA), Immune Desert (ID), or Immune Suppressed (IS). Potential predictive biomarkers including the TME subtypes, KRAS (wild type vs mutant), PD-L1 (negative vs. positive, samples with > 1% tumor cells for PD-L1 were considered positive), CD8 expression (low vs. high), and Treg cells (low vs. high) in tumor microenvironment were evaluated for correlation with overall survival (OS), progression free survival (PFS) and disease control rate (DCR, defined as complete response + partial response + stable disease). Results: Among the 22 patients, 16 (72.7%) had liver metastasis and 15 (68.2%) had lung metastasis. KRAS mutation was found in 16 (68.2%) patients. 11/21 (52.4%) were positive for PD-L1. 12 (54.5%) had high CD8 expression, whereas 9/21 (42.9%) had high Treg cells in tumor microenvironment. Ten (45.5%) patients were classified as biomarker-positive (IA + IS subtypes) and 12 (54.5%) were biomarker-negative (A + ID) based on Xerna TME panel. Two (9.1%) patients achieved partial response, 12 (54.5%) had stable disease, and five (22.7%) developed progressive disease. The median PFS was 5.6 months and median OS was 13.1 months. No significant correlation was observed between RAS mutation (p = 0.664, p = 0.609), PD-L1 expression (p = 0.287, p = 0.173), CD8 (p = 0.152, p = 0.456) and PFS or OS. Low Treg was found to be associated with prolonged PFS (median: 9.8 vs. 1.9 months, p = 0.011) but not OS (p = 0.280). Similarly, only low Treg level was related with DCR (83.3% vs. 33.3%, p = 0.032). While not reaching statistical significance, Xerna TME biomarker-positive patients showed trends for higher median PFS (7.9 months vs. 4.1 months, p = 0.254), median OS (15.75 months vs. 11.9 months, p = 0.378), and higher DCR (70% vs. 58%, p = 0.675) compared to biomarker-negative patients. Additionally, the two patients with partial responses were Xerna TME biomarker-positive. Conclusions: Our study demonstrated that low Treg in tumor microenvironment is correlated with better prognosis in patients with refractory metastatic pMMR CRC who were treated with regorafenib plus nivolumab. Xerna TME panel analysis of these patients also showed trends for predictive clinical benefit. Prospective and larger cohort studies are needed to better define predictive biomarkers for this combination in the future.