Dogs with naturally occurring cancer represent an important large animal model for drug development and testing novel immunotherapies. However, poorly defined immunophenotypes of canine leukocytes have limited the study of tumor immunology in dogs. The accumulation of myeloid derived suppressor cells (MDSCs) is known to be a key mechanism of immune suppression in tumor-bearing mice and in human patients. We sought to identify MDSCs in the blood of dogs with cancer. Peripheral blood mononuclear cells (PBMCs) from dogs with advanced or early stage cancer and from age-matched healthy controls were analyzed by flow cytometry and microscopy. Suppressive function was tested in T cell proliferation and cytokine elaboration assays. Semi-quantitative RT-PCR was used to identify potential mechanisms responsible for immunosuppression. PBMCs from dogs with advanced or metastatic cancer exhibited a significantly higher percentage of CD11b +CD14 -MHCII - cells compared to dogs diagnosed with early stage non-metastatic tumors and healthy dogs. These CD11b + CD14 -MHCII - cells constitute a subpopulation of activated granulocytes that co-purify with PBMCs, display polymorphonuclear granulocyte morphology, and demonstrate a potent ability to suppress proliferation and IFN-γ production in T cells from normal and tumor-bearing donors. Furthermore, these cells expressed hallmark suppressive factors of human MDSC including ARG1, iNOS2, TGF-β and IL-10. In summary our data demonstrate that MDSCs accumulate in the blood of dogs with advanced cancer and can be measured using this three-marker immunophenotype, thereby enabling prospective studies that can monitor MDSC burden.