Psoriasis vulgaris is an inflammatory skin disease caused by hyperactivated T cells regulated by positive and negative mechanisms; although the former have been much studied, the latter have not. We studied the regulatory mechanism mediated by myeloid-derived suppressor cells (MDSCs) and showed that MDSCs expanded in melanoma patients express dendritic cell-associated heparan sulfate proteoglycan-dependent integrin ligand, a critical mediator of T-cell suppressor function. We examined expansion of DC-HIL(+) MDSCs in psoriasis and characterized their functional properties. Frequency of DC-HIL(+) monocytic MDSCs (CD14(+)HLA-DR(no/low)) in blood and skin was markedly increased in psoriatic patients versus healthy control subjects, but there was no statistically significant relationship with disease severity (based on Psoriasis Area and Severity Index score). Blood DC-HIL(+) MDSC levels in untreated patients were significantly higher than in treated patients. Compared with melanoma-derived MDSCs, psoriatic MDSCs exhibited significantly reduced suppressor function and were less dependent on DC-HIL, but they were capable of inhibiting proliferation and IFN-γ and IL-17 responses of autologous T cells. Psoriatic MDSCs were functionally diverse among patients in their ability to suppress allogeneic T cells and in the use of either IL-17/arginase I or IFN-γ/inducible nitric oxide synthase axis as suppressor mechanisms. Thus, DC-HIL(+) MDSCs are expanded in psoriasis patients, and their mechanistic heterogeneity and relative functional deficiency may contribute to the development of psoriasis.