Ferroptosis is a non-apoptotic form of regulated cell death that is triggered by the discoordination of regulatory redox mechanisms culminating in massive peroxidation of polyunsaturated phospholipids. Ferroptosis inducers have shown considerable effectiveness in killing tumor cells in vitro, yet there has been no obvious success in experimental animal models, with the notable exception of immunodeficient mice. This suggests that the effect of ferroptosis on immune cells remains poorly understood. Pathologically activated neutrophils (PMNs), termed myeloid-derived suppressor cells (PMN-MDSCs), are major negative regulators of antitumor immunity. Here we found that unlike other myeloid cells, PMN-MDSCs in the tumor microenvironment spontaneously die by ferroptosis. Although decreasing the presence of PMN-MDSCs, ferroptosis induces the release of oxygenated lipids and limits the activity of human and mouse T cells. In immunocompetent mice, genetic and pharmacological inhibition of ferroptosis abrogates suppressive activity of PMN-MDSCs, reduces tumor progression and synergizes with immune checkpoint blockade to suppress the tumor growth in vivo. By contrast, induction of ferroptosis in immunocompetent mice promotes tumor growth. These studies reveal a previously unappreciated role for ferroptosis in tumor immunity as a unique and targetable immunosuppressive mechanism of PMN-MDSCs in the tumor microenvironment that can be pharmacologically modulated to limit tumor progression.