Myeloid-derived suppressor cells (MDSCs) are natural immunosuppressive cells and endogenous inhibitors of the immune system. We describe a simple and clinically compatible method of generating large numbers of MDSCs using the cultures of peripheral blood-isolated monocytes supplemented with prostaglandin E2 (PGE2). We observed that PGE2 induces endogenous cyclooxygenase (COX)2 expression in cultured monocytes, blocking their differentiation into CD1a+ dendritic cells (DCs) and inducing the expression of indoleamine 2,3-dioxygenase 1, IL-4Rα, nitric oxide synthase 2 and IL-10 - typical MDSC-associated suppressive factors. The establishment of a positive feedback loop between PGE2 and COX2, the key regulator of PGE2 synthesis, is both necessary and sufficient to promote the development of CD1a+ DCs to CD14+CD33+CD34+ monocytic MDSCs in granulocyte macrophage colony stimulating factor/IL-4-supplemented monocyte cultures, their stability, production of multiple immunosuppressive mediators and cytotoxic T lymphocyte-suppressive function. In addition to PGE2, selective E-prostanoid receptor (EP)2- and EP4-agonists, but not EP3/1 agonists, also induce the MDSCs development, suggesting that other activators of the EP2/4- and EP2/4-driven signaling pathway (adenylate cyclase/cAMP/PKA/CREB) may be used to promote the development of suppressive cells. Our observations provide a simple method for generating large numbers of MDSCs for the immunotherapy of autoimmune diseases, chronic inflammatory disorders and transplant rejection.