The mechanism of tumor-associated T cell dysfunction remains an unresolved problem of tumor immunology. Development of T cell defects in tumor-bearing hosts are often associated with increased production of immature myeloid cells. In tumor-bearing mice, these immature myeloid cells are represented by a population of Gr-1+ cells. In this study we investigated an effect of these cells on T cell function. Gr-1+ cells were isolated from MethA sarcoma or C3 tumor-bearing mice using cell sorting. These Gr-1+ cells expressed myeloid cell marker CD11b and MHC class I molecules, but they lacked expression of MHC class II molecules. Tumor-induced Gr-1+ cells did not affect T cell responses to Con A and to a peptide presented by MHC class II. In sharp contrast, Gr-1+ cells completely blocked T cell response to a peptide presented by MHC class I in vitro and in vivo. Block of the specific MHC class I molecules on the surface of Gr-1+ cells completely abrogated the observed effects of these cells. Thus, immature myeloid cells specifically inhibited CD8-mediated Ag-specific T cell response, but not CD4-mediated T cell response. Differentiation of Gr-1+ cells in the presence of growth factors and all-trans retinoic acid completely eliminated inhibitory potential of these cells. This may suggest a new approach to cancer treatment.