Myeloid-derived suppressor cells (MDSC) have emerged as key immune modulators in various tumor models and human malignancies, but their characteristics in humans remain to be unequivocally defined. In this study, we have examined circulating CD14(+)HLA-DR(-/low) MDSC in 34 advanced malignant melanoma (MM) patients. Their frequency is significantly increased and associated with disease activity. Contrary to the common notion that MDSC are a heterogeneous population of exclusively immature cells, we find the coexpression of markers associated with mature phenotype. We show for the first time the overexpression of CD80, CD83, and DC-Sign in human MDSC. Further, increased levels of signal transducer and activator of transcription 3 (Stat3), an important regulator in MDSC development and function, were noted in MM-MDSC. Stat3 was altered toward an active, phosphorylated state in the HLA-DR(-) population of CD14(+) cells and was more reactive to activating stimuli in patients. Importantly, inhibition of Stat3 abolished their suppressive activity almost completely. The described MM-MDSC use arginase in conjunction with other yet undefined mechanisms to suppress CD4(+) and CD8(+) T cells. Several observations suggest a redox imbalance in MDSC and indicate an important role of Stat3-dependent oxidative stress in MDSC-mediated T-cell suppression. These results emphasize the diversity of MDSC in human cancer and provide potential targets for therapeutic interventions.