Chronic inflammation often precedes malignant transformation and later drives tumor progression. Likewise, subversion of the immune system plays a role in tumor progression, with tumoral immune escape now well recognized as a crucial hallmark of cancer. Myeloid-derived suppressor cells (MDSC) are elevated in most individuals with cancer, where their accumulation and suppressive activity are driven by inflammation. Thus, MDSCs may define an element of the pathogenic inflammatory processes that drives immune escape. The secreted alarmin HMGB1 is a proinflammatory partner, inducer, and chaperone for many proinflammatory molecules that MDSCs develop. Therefore, in this study, we examined HMGB1 as a potential regulator of MDSCs. In murine tumor systems, HMGB1 was ubiquitous in the tumor microenvironment, activating the NF-κB signal transduction pathway in MDSCs and regulating their quantity and quality. We found that HMGB1 promotes the development of MDSCs from bone marrow progenitor cells, contributing to their ability to suppress antigen-driven activation of CD4⁺ and CD8⁺ T cells. Furthermore, HMGB1 increased MDSC-mediated production of IL-10, enhanced crosstalk between MDSCs and macrophages, and facilitated the ability of MDSCs to downregulate expression of the T-cell homing receptor L-selectin. Overall, our results revealed a pivotal role for HMGB1 in the development and cancerous contributions of MDSCs. Cancer Res; 74(20); 5723–33. ©2014 AACR.