Tumour-induced myeloid-derived suppressor cells (MDSC) promote immune suppression and mediate tumour progression. However, the molecular basis for the generation of MDSC, which in mice co-express the CD11b(+) and Gr-1(+) cell surface markers remains unclear. Because CD11b(+)Gr-1(+) cells expand during progressive tumour growth, this suggests that tumour-induced events alter signalling pathways that affect normal myeloid cell development. Interferon regulatory factor-8 (IRF-8), a member of the IFN-gamma regulatory factor family, is essential for normal myelopoiesis. We therefore examined whether IRF-8 modulated tumour-induced CD11b(+)Gr-1(+) cell development or accumulation using both implantable (4T1) and transgenic (MMTV-PyMT) mouse models of mammary tumour growth. In the 4T1 model, both splenic and bone marrow-derived CD11b(+)Gr-1(+) cells of tumour-bearing mice displayed a marked reduction in IRF-8 expression compared to control populations. A causal link between IRF-8 expression and the emergence of tumour-induced CD11b(+)Gr-1(+) cells was explored in vivo using a double transgenic (dTg) mouse model designed to express transgenes for both IRF-8 and mammary carcinoma development. Despite the fact that tumour growth was unaffected, splenomegaly, as well as the frequencies and absolute numbers of CD11b(+)Gr-1(+) cells were significantly lower in dTg mice when compared with single transgenic tumour-bearing mice. Overall, these data reveal that IRF-8 plays an important role in tumour-induced development and/or accumulation of CD11b(+)Gr-1(+) cells, and establishes a molecular basis for the potential manipulation of these myeloid populations for cancer therapy.