Although FTY720 may alter migration and homing of lymphocytes via sphingosine-1-phosphate (S1P) receptors, our recent studies indicated that FTY720 directly controls the differentiation of Th1 cells to regulatory T cells (Tregs) by targeting S1P1. However, the pharmacological function of FTY720 in immunological hepatic injury remains unknown. In this study, the role and regulatory signaling pathway of S1P receptor were investigated using a pharmacological approach in immune-mediated hepatic injury (IMH). In the context of IMH, FTY720 significantly ameliorated mortality and hepatic pathology. In FTY720-treated mice, recruited CD11b+Gr1+ myeloid-derived suppressor cells (MDSCs) mediate protection against IMH and are functional suppressive immune modulators that result in fewer IFN-γ–producing Th1 cells and more Foxp3+ Tregs. In agreement, FTY720-treated MDSCs promote the reciprocal differentiation between Th1 cells and Tregs in vitro and in vivo. Mechanistically, FTY720 treatment induced inducible NO synthase expression and NO production in MDSCs. Pharmacologic inhibition of inducible NO synthase completely eliminates MDSC suppressive function and eradicates their inducible effects on T cell differentiation. Finally, the mTOR inhibitor, rapamycin, photocopies the effects of FTY720 on MDSCs, implicating mTOR as a downstream effector of S1P1 signaling. This study identifies MDSCs as an essential component that provides protection against IMH following FTY720 or rapamycin treatment, validating the S1P1–mTOR signaling axis as a potential therapeutic target in hepatic injury.