TIM-3 is constitutively expressed on subsets of macrophages and dendritic cells. Its expression on other cells of the innate immune system and its role in fetomaternal tolerance has not yet been explored. In this study, we investigate the role of TIM-3-expressing innate immune cells in the regulation of tolerance at the fetomaternal interface (FMI) using an allogeneic mouse model of pregnancy. Blockade of TIM-3 results in accumulation of inflammatory granulocytes and macrophages at the uteroplacental interface and upregulation of proinflammatory cytokines. Furthermore, TIM-3 blockade inhibits the phagocytic potential of uterine macrophages resulting in a build up of apoptotic bodies at the uteroplacental interface that elicits a local immune response. In response to inflammatory cytokines, Ly-6C(hi)G(neg) monocytic myeloid-derived suppressor cells expressing inducible NO synthase and arginase 1 are induced. However, these suppressive cells fail to downregulate the inflammatory cascade induced by inflammatory granulocytes (Ly-6C(int)G(hi)) and apoptotic cells; the increased production of IFN-γ and TNF-α by inflammatory granulocytes leads to abrogation of tolerance at the FMI and fetal rejection. These data highlight the interplay between cells of the innate immune system at the FMI and their influence on successful pregnancy in mice.