Background: Colorectal cancer (CRC) is the third most common cancer worldwide. Tumor cell PD-L1 expression has been shown to enable immune evasion by suppressing the immune system's active T-cell-mediated response. Aim: To investigate the expression of PD-L1 in CRC and its correlation with microsatellite instability (MSI) and cytotoxic tumor-infiltrating lymphocytes. Methods: The pathological specimens of 49 cases of CRC were studied for PD-L1 expression and its correlation with different clinicopathological parameters, including MSI and cytotoxic CD8+ve tumor-infiltrating lymphocytes. Results: High PD-L1 expression in the microenvironment was significantly higher in low-grade tumors compared to high-grade tumors (50% vs. 12%, respectively; p = 0.008). Additionally, high PD-L1 expression in the microenvironment was significantly associated with a lack of mucinous change (p = 0.019), low T stage (p = 0.001), and non-infiltrative (pushing) tumor borders (p = 0.037). High PD-L1 expression in cancer cells was more prevalent in low T stage tumors and those with a high peritumoral CD8+ lymphocyte count. All cases of high PD-L1 expression in cancer cells also showed high PD-L1 expression in the microenvironment (p < 0.001). There was a significant relationship between intratumoral CD8+ lymphocyte count and MSI (p = 0.026), with all MSI-low cases showing a high intratumoral CD8+ lymphocyte count. There was no significant relationship between PD-L1 expression and MSI. Conclusions: PD-L1 expression in the microenvironment was significantly correlated with tumor grade, mucinous change, type of tumor border, and T stage. This suggests a prognostic role for PD-L1 expression in colon cancer.