To date, myeloid-derived suppressor cells (MDSC) have been best studied in cancer, where they represent an escape mechanism for immune surveillance. MDSC are now also gaining interest in the context of transplantation. Suppressive CD11b(+) myeloid progenitor cells have been reported to expand endogenously during BM chimerism induction in mice; in particular, in irradiated MHC-matched BM chimeras and in parent-in-F1 BM chimeras. Myeloid cell expansion coincided with a time frame where donor lymphocyte infusion (DLI) therapy-mediated GVL effects without GVHD. Hypothesizing that regulatory myeloid cells may have a role in regulating post-transplant T-cell alloreactivity, we performed a detailed phenotypic and functional characterization of these cells in the parent-in-F1 C57BL/6 → [C57BL/6xDBA2] model. We found that transiently expanding CD11b(+) myeloid progenitor cells comprise the two phenotypically and functionally distinct mononuclear and polymorphonuclear MDSC subsets that were recently described in tumor-bearing mice. Both MDSC subsets suppressed in vitro and in vivo alloreactive T-cell proliferation. Also, both the subsets mediated enhanced in vitro suppression when harvested from chimeras, given a prior in vivo challenge with non-tolerant donor T cells, indicating that allo-activated T cells can activate MDSC in vivo. This study provides the basis to investigate the-potentially beneficial-role of expanding MDSC in influencing the risk of GVHD during chimerism induction.