Myeloid-derived suppressor cells (MDSC) are a heterogeneous population of immature myeloid cells that promote tumor progression. In this study, we demonstrated that activation of a C-type lectin receptor, dectin-1, in MDSC differentially modulates the function of different MDSC subsets. Yeast-derived whole β-glucan particles (WGP; a ligand to engage and activate dectin-1, oral treatment in vivo) significantly decreased tumor weight and splenomegaly in tumor-bearing mice with reduced accumulation of polymorphonuclear MDSC but not monocytic MDSC (M-MDSC), and decreased polymorphonuclear MDSC suppression in vitro through the induction of respiratory burst and apoptosis. On a different axis, WGP-treated M-MDSC differentiated into F4/80+ CD11c+ cells in vitro that served as potent APC to induce Ag-specific CD4+ and CD8+ T cell responses in a dectin-1–dependent manner. Additionally, Erk1/2 phosphorylation was required for the acquisition of APC properties in M-MDSC. Moreover, WGP-treated M-MDSC differentiated into CD11c+ cells in vivo with high MHC class II expression and induced decreased tumor burden when inoculated sc with Lewis lung carcinoma cells. This effect was dependent on the dectin-1 receptor. Strikingly, patients with non–small cell lung carcinoma that had received WGP treatment for 10–14 d prior to any other treatment had a decreased frequency of CD14− HLA-DR− CD11b+ CD33+ MDSC in the peripheral blood. Overall, these data indicate that WGP may be a potent immune modulator of MDSC suppressive function and differentiation in cancer.