Abstract The tumor microenvironment is characterized by regulatory T cells, type II macrophages, myeloid-derived suppressor cells, and other immunosuppressive cells that promote malignant progression. Here we report the identification of a novel BDCA1+CD14+ population of immunosuppressive myeloid cells that are expanded in melanoma patients and are present in dendritic cell–based vaccines, where they suppress CD4+ T cells in an antigen-specific manner. Mechanistic investigations showed that BDCA1+CD14+ cells expressed high levels of the immune checkpoint molecule PD-L1 to hinder T-cell proliferation. While this BDCA1+CD14+ cell population expressed markers of both BDCA1+ dendritic cells and monocytes, analyses of function, transcriptome, and proteome established their unique nature as exploited by tumors for immune escape. We propose that targeting these cells may improve the efficacy of cancer immunotherapy. Cancer Res; 76(15); 4332–46. ©2016 AACR.