Myeloid-derived suppressor cells (MDSCs) potently suppress the anti-tumor immune responses and also orchestrate the tumor microenvironment that favors tumor angiogenesis and metastasis. The molecular networks regulating the accumulation and functions of tumor-expanded MDSCs are largely unknown. In this study, we identified microRNA-494 (miR-494), whose expression was dramatically induced by tumor-derived factors, as an essential player in regulating the accumulation and activity of MDSCs by targeting of phosphatase and tensin homolog (PTEN) and activation of the Akt pathway. TGF-β1 was found to be the main tumor-derived factor responsible for the upregulation of miR-494 in MDSCs. Expression of miR-494 not only enhanced CXCR4-mediated MDSC chemotaxis but also altered the intrinsic apoptotic/survival signal by targeting of PTEN, thus contributing to the accumulation of MDSCs in tumor tissues. Consequently, downregulation of PTEN resulted in increased activity of the Akt pathway and the subsequent upregulation of MMPs for facilitation of tumor cell invasion and metastasis. Knockdown of miR-494 significantly reversed the activity of MDSCs and inhibited the tumor growth and metastasis of 4T1 murine breast cancer in vivo. Collectively, our findings reveal that TGF-β1-induced miR-494 expression in MDSCs plays a critical role in the molecular events governing the accumulation and functions of tumor-expanded MDSCs and might be identified as a potential target in cancer therapy.