Abstract Chronic inflammation is an important contributor to the development of lung cancers, one of the most common malignancies worldwide, but the underlying molecular mechanisms of inflammation that specifically cue cancer risk remains poorly understood. We have previously found that blocking neutral lipid metabolism in lysosomal acid lipase knock-out mice (lal-/-) leads to severe tissue inflammation and diseases in multiple organs, including the lung. In an effort to identify downstream target genes of LAL to promote lung inflammation, Affymetrix GeneChip microarray analysis were performed and identified apoptosis inhibitor 6 (Api6, AIM, Sp-alpha, CD5L) as one of top increased expression gene (70 folds in the lal-/- lung). This aberrant up-regulation of Api6 occurs primarily in alveolar type II (AT II) epithelial cells of lal-/- mice and this up-regulation of Api6 can be reduced by treatment of ligands for peroxisome proliferator-activated receptor gamma (PPARgamma) in lal-/- mice. To determine the functional role of Api6 in AT II epithelial cells, an epithelial-specific CCSP-rtTA/(TetO)7-CMV-Api6 bitransgenic mouse model has been generated. Here we report that Api6 is a pro-inflammatory and oncogenic molecule. Api6 overexpression inhibited apoptosis and activated oncogenic signaling in AT II lung epithelial cells, inducing emphysema and adenocarcinoma. Additionally, Api6 overexpression in AT II cells increased the concentrations of pro-inflammatory cytokines/chemokines in bronchoalveolar lavage fluid and serum, which promote expansion of myeloid derived suppressor cells (MDSCs) in the lung and blood but not in bone marrow or spleen. Lung MDSCs suppressed T cell proliferation and activity in vitro and reduced levels of T cells in vivo following doxycycline treatment to activate Api6. Together, our findings establish that Api6 promotes lung tumorigenesis by blocking a mechanism of epithelial apoptosis that would normally support immunosurveillance. In humans, expression of the Api6 gene is up-regulated in chronic obstructive pulmonary disease (COPD, the major phenotype is emphysema) and lung cancer. Citation Format: {Authors}. {Abstract title} [abstract]. In: Proceedings of the 103rd Annual Meeting of the American Association for Cancer Research; 2012 Mar 31-Apr 4; Chicago, IL. Philadelphia (PA): AACR; Cancer Res 2012;72(8 Suppl):Abstract nr 4975. doi:1538-7445.AM2012-4975