Abstract Abnormal differentiation of dendritic cell (DC) is a critical factor contributing into ineffective immune response in cancer. We have searched for the genes that could be involved into tumor-induced defects in DC differentiation and found that tumor-derived factors consistently up-regulated expression of myeloid related protein 14 (MRP14) and its partner MRP8 in hematopoietic progenitor and myeloid cells during DC differentiation. Normal DC differentiation was associated with dramatic down-regulation of MRP14/8, whereas accumulation of immature myeloid cells was associated with persistently high levels of these proteins. Overexpression of these proteins in embryonic stem cells resulted in inhibition of DC differentiation and accumulation of immature myeloid cells able to form myeloid colonies. It is known that Gr-1+ myeloid-derived suppressor cells (MDSC) frequently accumulate in tumor-bearing mice and during in vitro DC differentiation in the presence of tumor-derived factors. We have found that in tumor-bearing mice MRP14/8 were exclusively accumulated in MDSC. Accumulation of these proteins was controlled by up-regulation of STAT3. MRP14/8 knockout mice had normal level of DCs or MDSC suggesting that MRP proteins were not required for accumulation of MDSC in cancer. Thus, this study demonstrates that tumor-induced up-regulation of MRPs inhibits DC differentiation, which may suggest a novel molecular mechanism of tumor-induced abnormalities in myeloid cells in cancer.