Background Brain tumor ranks as the most devastating cancer type. The complex tumor immune microenvironment prevents brain tumor from receiving therapeutic benefits. The purpose of this study was to stratify brain tumors based on their distinct immune infiltration signatures to facilitate better clinical decision making and prognosis prediction. Methods We developed a deep learning model to characterize immune infiltration from transcriptome. The developed model was applied to distill expression signatures of transcriptome of brain tumor samples. We performed molecular subtyping with the extracted expression signatures to unveil brain tumor subtypes. Computational methods, including gene set enrichment analysis, Kaplan-Meier survival and multivariate Cox regression analyses, were employed. Results We identified two distinctive subtypes (i.e. C1/2) of brain tumor featured by distinct immune infiltration signatures. The C1 subtype is characterized by protective immune infiltration signatures, including high infiltration of CD8+ T cells and activation of CX3CL1. The C2 subtype has an extensive infiltration of tumor-associated macrophages and microglia, and was enriched with immune suppressive, wound-healing, and angiogenic signatures. The C1 subtype had significantly better prognosis as compared with C2 (Log-rank test, HR: 2.5, 95% CI: 2.2 - 2.7; P = 8.2e-78). This difference remained statistically significant (multivariate Cox model, HR: 2.2, 95% CI: 1.7 - 2.9; P = 3.7e-10) by taking into account age, gender, recurrent/secondary status at sampling time, tumor grade, histology, radio-chemotherapy, IDH mutation, MGMT methylation, and co-deletion of 1p and 19q. This finding was validated in six datasets. The C2 subtype of glioblastoma patients with IDH mutation has poor survival analogous to those without IDH mutation (Log-rank test, adjusted P = 0.8), while C1 has favorable prognosis as compared with glioblastoma of C2 subtype with IDH mutation (Log-rank test, adjusted P = 1.2e-3) or without IDH mutation (Log-rank test, adjusted P = 1.3e-6). Conclusions We identified two distinctive subtypes of brain tumor with different immune infiltration signatures, which might be helpful as an independent prognosticator for brain tumor.