Epidemiological and experimental observations support the hypothesis that chronic inflammation contributes to cancer development and progression; however, the mechanisms underlying the relationship between inflammation and cancer are poorly understood. To study these mechanisms, we have transfected the mouse 4T1 mammary carcinoma with the proinflammatory cytokine IL-1beta to produce a chronic inflammatory microenvironment at the tumor site. Mice with 4T1/IL-1beta tumors have a decreased survival time and elevated levels of immature splenic Gr1+CD11b+ myeloid-derived cells. These myeloid suppressor cells (MSC) are present in many patients with cancer and inhibit the activation of CD4+ and CD8+ T lymphocytes. 4T1/IL-1beta-induced MSC do not express the IL-1R, suggesting that the cytokine does not directly activate MSC. Neither T or B cells nor NKT cells are involved in the IL-1beta-induced increase of MSC because RAG2-/- mice and nude mice with 4T1/IL-1beta tumors also have elevated MSC levels. MSC levels remain elevated in mice inoculated with 4T1/IL-1beta even after the primary tumor is surgically removed, indicating that the IL-1beta effect is long lived. Collectively, these findings suggest that inflammation promotes malignancy via proinflammatory cytokines, such as IL-1beta, which enhance immune suppression through the induction of MSC, thereby counteracting immune surveillance and allowing the outgrowth and proliferation of malignant cells.