Background/Aims: Neutrophils obtain immunosuppressive function during tumor development, yet the mechanisms are largely unknown. This study explored whether and how mesenchymal stromal cells (MSCs), the key component of tumor microenvironment, regulate the suppressive function of neutrophils. Methods: Immunosuppressive function of neutrophils was evaluated by T cell proliferation assay and 4T1 breast tumor model; molecular mechanisms were explored by transcriptional profiling, Real-time RT-PCR, arginase activity assay, and iNOS inhibition experiments. Results: After being cocultured with MSCs primed by TNF-α (TNF-MSCs), CD11b+Ly6G+ neutrophils isolated from bone marrow of normal mice or spleen of tumor-bearing mice obtained immunosuppressive function to inhibit T cell proliferation in vitro, and to enhance 4T1 tumor progression in vivo. Moreover, arginase activity and expression of iNOS, saa3, some cytokines and chemokines and their receptors, were upregulated in neutrophils after co-culture with TNF-MSCs. Inhibition of iNOS activity attenuated the suppressive effect of TNF-MSC pre-cocultured neutrophils on T cell proliferation. Conclusion: MSCs program neutrophils into an immunosuppressive and tumor-promoting phenotype.