Abstract IL-27 is a pleiotropic cytokine that exhibits stimulatory/regulatory functions on multiple lineages of immune cells and has a potential to be used as a therapeutic for cancer. We have recently demonstrated that administration of IL-27 producing adeno-associated virus (AAV-IL-27) exhibits potent inhibition of tumor growth in mouse models. In this study, we demonstrate that AAV-IL-27 treatment leads to significant expansion of CD11b+Gr1+ myeloid cells. AAV-IL-27–induced expansion of CD11b+Gr1+ cells is IL-27R–dependent and requires Stat3 signaling, but it is inhibited by Stat1 signaling. AAV-IL-27 treatment does not increase the self-renewal capacity of CD11b+Gr1+ cells but induces significant expansion of Lin−Sca1+c-Kit+ (LSK) and granulocyte–monocyte progenitor cells. Despite exhibiting significant suppression of T cells in vitro, IL-27–induced CD11b+Gr1+ cells lost the tumor-promoting activity in vivo and overall play an antitumor role. In tumors from AAV-IL-27–treated mice, CD11b+Gr1+ cells are largely F4/80+ and express high levels of MHC class I/II and M1 macrophage markers. Thus, IL-27 gene therapy induces Stat3-mediated expansion of CD11b+Gr1+ myeloid cells and promotes accumulation of M1 macrophages in the tumor microenvironment.