Abstract Programmed death-ligand 1 (PD-L1) is an inhibitory ligand that binds to PD-1 to suppress T cell activation. PD-L1 is constitutively expressed and inducible in tumor cells, but the expression profiles and regulatory mechanism of PD-L1 in myeloid-derived suppressor cells (MDSCs) are largely unknown. We report that PD-L1 is abundantly expressed in tumor-infiltrating immune cells in human colon carcinoma, and 25–67% CD11b+CD33+ myeloid-derived suppressor cells (MDSCs) from peripheral blood of human colon cancer patients are PD-L1+. Using a spontaneous colon cancer mouse model, we observed that PD-L1+MDSCs increased significantly in tumor-bearing mice as compared to MDSCs from tumor-free mice. Interestingly, the highest PD-L1+ MDSCs were observed in the tumor microenvironment in which 56–71% tumor-infiltrating MDSCs are PD-L1+ in vivo. In contrast, PD-L1+ MDSCs are significantly less in secondary lymphoid organs and peripheral blood as compared to the tumor tissues, whereas, bone marrow MDSCs are essentially PD-L1− in tumor-bearing mice. IFNg is highly expressed in cells of the tumor tissues and IFNg neutralization significantly decreased PD-L1+ MDSCs in the tumor microenvironment in vivo. However, IFNg-activated pSTAT1 does not bind to the cd274 promoter in CD11b+Gr1+PD-L1+ myeloid cells. Instead, pSTAT1 activates expression of IRF1, IRF5, IRF7 and IRF8 in MDSCs, and only pSTAT1-activated IRF1 binds to an unique IRF-binding sequence element in vitro and chromatin in vivo in the cd274 promoter to activate PD-L1 transcription. Our data determine that PD-L1 is highly expressed in tumor-infiltrating MDSCs and in a less degree in lymphoid organs, and the pSTAT1-IRF1 axis regulates PD-L1 expression in MDSCs.