Fas ligand expression in certain tumors has been proposed to contribute to immunosuppression and poor prognosis. However, immunotherapeutic approaches may elicit the Fas-mediated elimination of immunoregulatory T cells (Tregs) and myeloid-derived suppressor cells (MDSC) within tumors which represent major obstacles for cancer immunotherapy. Previously, we showed that Interleukin (IL)-2 and agonistic CD40 antibody (αCD40) elicited synergistic anti-tumor responses coincident with the efficient removal of Tregs and MDSC. We now demonstrate in two murine tumor models that Treg and MDSC loss within the tumor microenvironment after IL-2/αCD40 occurs through a Fas-dependent cell death pathway. Among tumor-infiltrating leukocytes, CD8+ T cells, neutrophils and immature myeloid cells expressed Fas ligand following treatment. Fas was expressed by tumor-associated Tregs and immature myeloid cells, including MDSC. Tregs and MDSC in the tumor microenvironment expressed active caspases after IL-2/αCD40 therapy and, in contrast to effector T cells, Tregs significantly down-regulated Bcl-2 expression. In contrast, Tregs and MDSC proliferated and expanded in the spleen following treatment. Adoptive transfer of Fas-deficient Tregs or MDSC into wildtype, Treg or MDSC-depleted hosts, resulted in the persistence of Tregs or MDSC and the loss of anti-tumor efficacy in response to IL-2/αCD40. These results demonstrate the importance of Fas-mediated Treg/MDSC removal for successful anti-tumor immunotherapy. Our results suggest that immunotherapeutic strategies that include exploiting Treg and MDSC susceptibility to Fas-mediated apoptosis hold promise for treatment of cancer.