Myeloid-derived suppressor cells (MDSC) are believed to play a role in immune suppression and subsequent failure of T cells to mount an efficient anti-tumor response, by employing both direct T-cell inhibition as well as induction of regulatory T cells (Tregs). Investigating the frequency and function of immune suppressive cell subsets in the peripheral blood of 41 patients with prostate cancer (PC) and 36 healthy donors (HD) showed a significant increase in circulating CD14⁺ HLA-DR^low/neg monocytic MDSC (M-MDSC) and Tregs in patients with PC compared to HD. Furthermore, M-MDSC frequencies correlated positively with Treg levels. In vitro proliferation assay with autologous T cells confirmed M-MDSC-mediated T-cell suppression, and intracellular staining of immune suppressive enzyme iNOS revealed a higher expression in M-MDSC from patients with PC. Increased frequencies of M-MDSC correlated with known negative prognostic markers in patients with PC including elevated levels of lactate dehydrogenase and prostate-specific antigen. Accordingly, high levels of M-MDSC were associated with a shorter median overall survival. Our data strongly suggest that M-MDSC, possibly along with Tregs, play a role in establishing an immune suppressive environment in patients with PC. Moreover, correlation of M-MDSC frequency with known prognostic markers and the observed impact on OS could reflect a possible role in tumor progression. Further insight into the generation and function of MDSC and their interplay with Tregs and other cell types may suggest ways to tackle their induction and/or function to improve immunological tumor control.