Programmed death-ligand 1 (PD-L1) is an inhibitory ligand that binds to PD-1 to suppress T cell activation. PD-L1 is constitutively expressed and inducible in tumor cells, but the expression profiles and regulatory mechanism of PD-L1 in myeloid-derived suppressor cells (MDSCs) are largely unknown. We report that PD-L1 is abundantly expressed in tumor-infiltrating leukocytes in human patients with both microsatellite instable and microsatellite stable colon cancer. About 60% CD11b⁺CD33⁺HLA-DR⁻ MDSCs from peripheral blood of human colon cancer patients are PD-L1⁺. PD-L1⁺ MDSCs are also significantly higher in tumor-bearing mice than in tumor-free mice. Interestingly, the highest PD-L1⁺ MDSCs were observed in the tumor microenvironment in which 56–71% tumor-infiltrating MDSCs are PD-L1⁺ in vivo. In contrast, PD-L1⁺ MDSCs are significantly less in secondary lymphoid organs and peripheral blood as compared to the tumor tissues, whereas bone marrow MDSCs are essentially PD-L1⁻ in tumor-bearing mice. IFNγ is highly expressed in cells of the tumor tissues and IFNγ neutralization significantly decreased PD-L1⁺ MDSCs in the tumor microenvironment in vivo. However, IFNγ-activated pSTAT1 does not bind to the cd274 promoter in MDSCs. Instead, pSTAT1 activates expression of IRF1, IRF5, IRF7 and IRF8 in MDSCs, and only pSTAT1-activated IRF1 binds to a unique IRF-binding sequence element in vitro and chromatin in vivo in the cd274 promoter to activate PD-L1 transcription. Our data determine that PD-L1 is highly expressed in tumor-infiltrating MDSCs and in a lesser degree in lymphoid organs, and the pSTAT1-IRF1 axis regulates PD-L1 expression in MDSCs.