Abstract Myeloid-derived suppressor cells (MDSCs) are essential players in cancer-associated immune dysfunction. We report that the differentiation and functional stability of human monocytic MDSCs is driven by a single cancer-associated inflammatory mediator, prostaglandin E2 (PGE2), and depends on the establishment of a positive feedback between PGE2 and the key regulator of PGE2 synthesis, COX-2. PGE2 abrogates the differentiation of CD1a+ DC from monocytes, redirecting it towards CD14+CD33+CD34+ cells expressing all MDSC-associated suppressive factors: IDO, arginase, NOS2 and IL-10, and inducing their CTL-suppressive functions. Moreover, PGE2 promotes the expression of endogenous COX2 and autocrine secretion of PGE2 in MDSCs, establishing a positive feedback loop that stabilizes the MDSC phenotype. Undisturbed COX2 activity and persistent production of PGE2 by MDSCs, isolated from cancer patients, was required for their continued expression of CXCR4 and responsiveness to CXCL12. Moreover, PGE2 also proved to be the key factor promoting the production of CXCL12 in cancer microenvironment, a chemokine exerting multiple tumor-promoting effects either directly by acting on cancer cells or indirectly by inducing angiogenesis and recruiting other immunosuppressive cells, i.e. Tregs and pDCs. In accordance with the physiological role of PGE2 in the development and functional stability of human cancer -associated MDSCs, we observed that the frequencies of CD11b+ CD33+ MDSCs in the ovarian cancer (OvCa) ascites closely correlate with the local production of PGE2 and expression of COX2, while the OvCa ascites environment can promote the induction of MDSCs from differentiating monocytes in a COX2-dependent manner. Importantly. disruption of COX2-PGE2 feedback in fully-developed MDSCs isolated from cancer patients, using COX2 inhibitors or inhibitors of EP2/EP4-dependent PGE2 signaling, eliminates the production of all other suppressive factors and terminates the CTL-suppressive function of MDSCs as well as eliminates both the expression of CXCR4 on MDSCs and the production of CXCL12, highlighting the key role of PGE2 in the tumor-accumulation of immunosuppressive cells. The currently demonstrated key role of the positive COX2-PGE2 feedback loop in the differentiation and functional stability of MDSCs facilitates the targeting of MDSCs in cancer immunotherapy and facilitates the development of additional MDSC-targeting therapies. Citation Format: {Authors}. {Abstract title} [abstract]. In: Proceedings of the 102nd Annual Meeting of the American Association for Cancer Research; 2011 Apr 2-6; Orlando, FL. Philadelphia (PA): AACR; Cancer Res 2011;71(8 Suppl):Abstract nr LB-250. doi:10.1158/1538-7445.AM2011-LB-250