The immune system has evolved mechanisms to protect the host from the deleterious effects of inflammation. The generation of immune suppressive cells like myeloid derived suppressor cells (MDSCs) that can counteract T cell responses represents one such strategy. There is an accumulation of immature myeloid cells or MDSCs in bone marrow (BM) and lymphoid organs under pathological conditions such as cancer. MDSCs represent a population of heterogeneous myeloid cells comprising of macrophages, granulocytes and dendritic cells that are at early stages of development. Although, the precise signaling pathways and molecular mechanisms that lead to MDSC generation and expansion in cancer remains to be elucidated. It is widely believed that perturbation of signaling pathways involved during normal hematopoietic and myeloid development under pathological conditions such as tumorogenesis contributes to the development of suppressive myeloid cells. In this review we discuss the role played by key signaling pathways such as PI3K, Ras, Jak/Stat and TGFb during myeloid development and how their deregulation under pathological conditions can lead to the generation of suppressive myeloid cells or MDSCs. Targeting these pathways should help in elucidating mechanisms that lead to the expansion of MDSCs in cancer and point to methods for eliminating these cells from the tumor microenvironment.