The dynamics of cancer immunosurveillance remain incompletely understood, hampering efforts to develop immunotherapy of cancer. We evaluated the evolving in vivo immune response to a spontaneous tumor in a genetically defined mouse model of pancreatic ductal adenocarcinoma from the inception of preinvasive disease to invasive cancer. We observed a prominent leukocytic infiltration even around the lowest grade preinvasive lesions, but immunosuppressive cells, including tumor-associated macrophages, myeloid-derived suppressor cells (MDSC), and regulatory T cells (T_reg), dominated the early response and persisted through invasive cancer. Effector T cells, however, were scarce in preinvasive lesions, found in only a subset of advanced cancers, and showed no evidence of activation. The lack of tumor-infiltrating effector T cells strongly correlated with the presence of intratumoral MDSC with a near mutual exclusion. In vitro, we found that MDSC suppressed T-cell proliferation. Overall, our results show that suppressive cells of the host immune system appear early during pancreatic tumorigenesis, preceding and outweighing antitumor cellular immunity, and likely contribute to disease progression. Thus, in contrast to the hypothesis that an early “elimination phase” of cancer immunosurveillance is eventually overwhelmed by a growing invasive tumor, our findings suggest that productive tumor immunity may be undermined from the start. Efforts to test potent inhibitors of MDSC, tumor-associated macrophages, and T_reg, particularly early in the disease represent important next steps for developing novel immunotherapy of cancer. [Cancer Res 2007;67(19):9518–27]