Myeloid-derived suppressor cells (MDSCs) represent a heterogeneous population that shares certain characteristics including an aberrant myeloid phenotype and the ability to suppress T cells. MDSCs have been predominantly studied in malignant diseases and findings suggest involvement in tumor-associated immune suppression. Chronic lymphocytic leukemia (CLL) is the leukemia with the highest incidence among adults. Immune defects occur already at early disease stages and impact the clinical course. We assessed presence, frequency, association to other immune parameters, and functional properties of circulating CD14⁺ cells lacking HLA-DR expression (HLA-DR^lo) in patients with untreated CLL. These monocytic cells represent one of the best-defined human MDSC subsets. Frequency of CD14⁺HLA-DR^lo cells was significantly increased in CLL patients. Furthermore, MDSCs suppressed in vitro T-cell activation and induced suppressive regulatory T cells (T_Regs). The MDSC-mediated modulation of T cells could be attributed to their increased indoleamine 2,3-dioxygenase (IDO) activity. CLL cells induced IDO^hi MDSCs from healthy donor monocytes suggesting bidirectional crosstalk between CLL-cells, MDSCs, and T_Regs. Overall, we identified a MDSC population that expands in CLL. The exact mechanisms responsible for such accumulation remain to be elucidated and it will be of interest to test whether antagonizing suppressive functions of CLL MDSCs could represent a mean for enhancing immune responses.