Myeloid‐derived suppressor cells (MDSCs) expand in an inflammatory microenvironment such as cancer and autoimmunity. To study if transplantation induces MDSCs and these cells regulate allograft survival, C57BL/6 donor hearts were transplanted into BALB/c recipients and endogenous MDSCs were characterized. The effects of adoptive transfer of transplant (tx), tumor (tm), and granulocyte‐colony stimulating factor (g‐csf)–expanded MDSCs or depletion of MDSC were assessed. MDSCs expanded after transplantation (1.7‐4.6‐fold) in the absence of immunosuppression, homed to allografts, and suppressed proliferation of CD4 T cells in vitro. Tx‐MDSCs differed phenotypically from tm‐MDSCs and g‐csf‐MDSCs. Among various surface markers, Rae‐1 expression was notably low and TGF‐β receptor II was high in tx‐MDSCs when compared to tm‐MDSCs and g‐csf‐MDSCs. Adoptive transfer of these three MDSCs led to differential graft survival: control (6 days), tx‐MDSCs (7.5 days), tm‐MDSCs (9.5 days), and g‐csf‐MDSCs (19.5 days). In combination with anti‐CD154 mAb, MDSCs synergistically extended graft survival from 40 days (anti‐CD154 alone) to 86 days with tm‐MDSCs and 132 days with g‐csf‐MDSCs. Early MDSC depletion (day 0 or 20), however, abrogated graft survival, but late depletion (day 25) did not. In conclusion, MDSCs expanded following transplantation, migrated to cardiac allografts, prolonged graft survival, and were synergistic with anti‐CD154 mAb.