Although myeloid-derived suppressor cells (MDSCs) are well known for their immunosuppressive function in several pathological conditions, the role of MDSCs in hepatitis B virus infection remains obscure. In this study, we investigated the frequency and function of MDSCs in the peripheral blood and liver of 91 chronic hepatitis B (CHB) patients. A higher percentage of MDSCs, defined as CD14+HLA-DR−/low, was detected in peripheral blood of CHB patients than that of the healthy controls. Moreover, high expression of programmed death 1 (PD-1) and secretion of IL-10 in this population were determined. The frequency of MDSCs was positively correlated with serum viral load, but it was negatively correlated with liver inflammatory injury. These cells were also abundant in liver tissue of CHB patients and were related to necroinflammatory activity. Furthermore, we found that these cells could suppress hepatitis B virus–specific CD8+ T cell response, including reduced proliferation and IFN-γ production, and inhibit degranulation of CD8+ T cells, including reduced production of granzyme B and perforin. Importantly, PD-1–induced IL-10 production by MDSCs was responsible for the suppressive activity. To our knowledge, for the first time our study proved that CD14+HLA-DR–/lowPD-1+ MDSCs in CHB patients contribute to an inadequate immune response against the virus and lead to chronic infection, which represents a potential target for therapeutic intervention.