Hepatic stellate cells (HSCs) are critical mediators of immunosuppression and the pathogenesis of hepatocellular carcinoma (HCC). Our previous work indicates that HSCs promote HCC progression by enhancing immunosuppressive cell populations including myeloid-derived suppressor cells (MDSCs) and regulatory T cells (Tregs). MDSCs are induced by inflammatory cytokines (e.g., prostaglandins) and are important in immune suppression. However, how HSCs mediate expansion of MDSCs is uncertain. Thus, we studied activated HSCs that could induce MDSCs from bone marrow cells and noted that HSC-induced MDSCs up-regulated immunosuppressive activity via iNOS, Arg-1, and IL-4Rα. After treating cells with a COX-2 inhibitor or an EP4 antagonist, we established that HSC-induced MDSC accumulation was mediated by the COX2-PGE2-EP4 signaling. Furthermore, in vivo animal studies confirmed that inhibition of HSC-derived PGE2 could inhibit HSC-induced MDSC accumulation and HCC growth. Thus, our data show that HSCs are required for MDSC accumulation mediated by the COX2-PGE2-EP4 pathway, and these data are the first to link HSC and MDSC subsets in HCC immune microenvironment and provide a rationale for targeting PGE2 signaling for HCC therapy.