Background BLCA is common cancer worldwide, aggressive, and fatal. Immunotherapy (ICT) has achieved an excellent curative effect in BLCA; however, only part of these patients can benefit from ICT treatment. MT1L belongs to pseudogene, and a previous study has suggested that MT1L can be used as an indicator of prognosis in colorectal cancer. However, the role of MT1L in BLCA has not yet been illuminated. Methods Data was collected from TCGA, and logistic regression, Kaplan-Meier Plotter, and multivariate Cox analysis have been performed to demonstrate the correlation between pseudogene MT1L and prognosis in BLCA. To identify the association of MT1L with tumor-infiltrating immune cells, TIMER and TISIDB were utilized. And GSEA was performed to illuminate the potential biologic function. Results The expression of MT1L was decreased in BLCA. And it is positively connected with immune cells, like Tregs(ρ=0.708) and MDSCs(ρ=0.664). We also confirmed that MT1L is related to typical markers of immune cells,like PD-1, CTLA-4. Besides, the high MT1L expression level is related to the high stage of T, N, and the high grade in BLCA and the increased expression of MT1L was significantly associated with the shorter OS of BLCA patients (P<0.05). Multivariate Cox analysis revealed that MT1L expression could be an independent prognostic factor of BLCA. Conclusion Collectively, our findings demonstrated that pseudogene MT1L regulates the immune microenvironment, correlates with poor survival, and serves as an independent prognostic biomarker in BLCA.