Merkel cell carcinoma (MCC) is a rare neuroendocrine tumor of the skin with high rates of local recurrence and distant metastases despite treatment with traditional cytotoxic chemotherapies. The recent advances in immunotherapy, including the use of immune checkpoint blockade (ICB) has revolutionized treatment for this disease and resulted in durable responses for some patients. However, many patients, due to underlying conditions, have been insufficiently evaluated for potential use of immunotherapy. Here we present a case of ICB treatment with Programmed cell death protein 1 (PD-1) inhibition in a patient with underlying interstitial lung disease (ILD) and a new diagnosis of MCC. Through a multidisciplinary approach, we were able to maintain close monitoring with serial clinical and radiographical follow-up. The patient achieved a complete response though unrelated medical issues resulting in a treatment hold. At the last follow-up, the patient continued to experience a durable response without evidence of recurrence. This case describes the use of pembrolizumab, a PD-1 inhibitor, for the treatment of MCC in a patient with underlying ILD. The use of active surveillance with a multidisciplinary approach resulted in successful treatment of MCC without exacerbation of the underlying ILD.