Functionally altered myeloid cells play an important role in immune suppression in cancer, in angiogenesis, and in tumor cells' invasion and metastases. Here, we report that inhibition of Notch signaling in hematopoietic progenitor cells (HPC), myeloid-derived suppressor cells (MDSC), and dendritic cells is directly involved in abnormal myeloid cell differentiation in cancer. Inhibition of Notch signaling was caused by the disruption of the interaction between Notch receptor and transcriptional repressor CSL, which is normally required for efficient transcription of target genes. This disruption was the result of serine phosphorylation of Notch. We demonstrated that increased activity of casein kinase 2 (CK2) observed in HPC and in MDSC could be responsible for the phosphorylation of Notch and downregulation of Notch signaling. Inhibition of CK2 by siRNA or by pharmacological inhibitor restored Notch signaling in myeloid cells and substantially improved their differentiation, both in vitro and in vivo. This study demonstrates a novel mechanism regulation of Notch signaling in cancer. This may suggest a new perspective for pharmacological regulation of differentiation of myeloid cells in cancer.