IL-12 is a potent immunostimulatory cytokine, but its impact as an antitumor drug in clinical practice is limited. Upsurge of regulatory T cells (Treg) in the tumor milieu has been proposed to limit the efficacy of the treatment. In this paper, two drugs (cyclophosphamide [CPA] and anti-CD25 mAb) widely used to eliminate Treg were used in an attempt to enhance the antitumor effect of IL-12 gene therapy. Both anti-CD25 and CPA combined with IL-12 were able to deplete intratumoral Treg and myeloid-derived suppressor cells (MDSC), but only IL-12 plus CPA achieved significant antitumor activity in mice with large established s.c. colon carcinoma. This therapeutic effect was associated with the emergence of a heterogeneous population of myeloid cells within the tumor, termed inflammatory myeloid cells (IMC), composed of Ly6C(high)Ly6G(low) inflammatory monocytes and Ly6G(high)Ly6C(+) neutrophils. IMC showed a distinctive pattern of cytokine/chemokine production, and in contrast to MDSC, they did not induce conversion of naive CD4(+) T cells into Treg. The appearance of IMC coincided with intense tumor infiltration by effector T cells, which was abrogated by elimination of IMC by anti-Gr1 mAb, a maneuver that abolished the antitumor effect of the therapy. Therefore, the combination of IL-12 and CPA eliminates intratumoral Treg and MDSC, while it induces the appearance of IMC within the tumor microenvironment. The latter effect is essential to facilitate effector T cell infiltration and subsequent tumor elimination.