Tumor-associated inflammation mediates the development of a systemic immunosuppressive milieu that is a major obstacle to effective treatment of cancer. Inflammation has been shown to promote the systemic expansion of immature myeloid cells which have been shown to exert immunosuppressive activity in laboratory models of cancer as well as cancer patients. Consequentially, significant effort is underway toward the development of therapies that decrease tumor-associated inflammation and immunosuppressive cells. The current study demonstrated that a previously described deep tissue imaging modality, which utilized indocyanine green-loaded calcium phosphosilicate nanoparticles (ICG-CPSNPs), could be utilized as an immunoregulatory agent. The theranostic application of ICG-CPSNPs as photosensitizers for photodynamic therapy was shown to block tumor growth in murine models of breast cancer, pancreatic cancer, and metastatic osteosarcoma by decreasing inflammation-expanded immature myeloid cells. Therefore, this therapeutic modality was termed PhotoImmunoNanoTherapy. As phosphorylated sphingolipid metabolites have been shown to have immunomodulatory roles, it was hypothesized that the reduction of immature myeloid cells by PhotoImmunoNanoTherapy was dependent upon bioactive sphingolipids. Mechanistically, PhotoImmunoNanoTherapy induced a sphingosine kinase 2-dependent increase in sphingosine-1-phosphate and dihydrosphingosine-1-phosphate. Furthermore, dihydrosphingosine-1-phosphate was shown to selectively abrogate myeloid lineage cells while concomitantly allowing the expansion of lymphocytes that exerted an antitumor effect. Collectively, these findings revealed that PhotoImmunoNanoTherapy, utilizing the novel nontoxic theranostic agent ICG-CPSNP, can decrease tumor-associated inflammation and immature myeloid cells in a sphingosine kinase 2-dependent manner. These findings further defined a novel myeloid regulatory role for dihydrosphingosine-1-phosphate. PhotoImmunoNanoTherapy holds the potential to be a revolutionary treatment for cancers with inflammatory and immunosuppressive phenotypes.