Myeloid-derived suppressor cells (MDSCs) are a heterogeneous population of myeloid progenitor cells and immature myeloid cells at different stages that are blocked from differentiating into mature myeloid cells under certain pathological conditions, such as cancer. They can exert a strong and broad-spectrum immunosuppressive function, and are regarded as one of the most important negative regulators of the immune system. It has been shown that a variety of cytokines and growth factors in the tumor environment can induce MDSCs expansion and activation through activating certain signaling pathways. Then, MDSCs use multiple mechanisms to suppress the functions of various immune cells, especially T cells, thus promoting immune tolerance to tumors. Clinical studies demonstrated that the levels of MDSCs in cancer patients was closely correlated with tumor clinical progression, and the immunotherapies targeting MDSCs are expected to become novel strategies against cancer. Here, we reviewed the recent progress about MDSCs and tumor immune tolerance, including MDSCs identification, mechanisms of MDSCs expansion and activation, mechanisms of MDSCs' immunosuppressive capability, as well as the clinical significance of MDSCs in cancer. We also discussed the remaining issues in this field that need to be elucidated.