Angiopoietin 2 (ANGPT2) is a proangiogenic cytokine whose expression is often upregulated by endothelial cells in tumors. Expression of its receptor, TIE2, defines a highly proangiogenic subpopulation of myeloid cells in circulation and tumors called TIE2-expressing monocytes/macrophages (TEMs). Genetic depletion of TEMs markedly reduces tumor angiogenesis in various tumor models, emphasizing their essential role in driving tumor progression. Previously, we demonstrated that ANGPT2 augments the expression of various proangiogenic genes, the potent immunosuppressive cytokine, IL-10, and a chemokine for regulatory T cells (Tregs), CCL17 by TEMs in vitro. We now show that TEMs also express higher levels of IL-10 than TIE2− macrophages in tumors and that ANGPT2-stimulated release of IL-10 by TEMs suppresses T cell proliferation, increases the ratio of CD4+ T cells to CD8+ T cells, and promotes the expansion of CD4+ CD25 high FOXP3+ Tregs. Furthermore, syngeneic murine tumors expressing high levels of ANGPT2 contained not only high numbers of TEMs but also increased numbers of Tregs, whereas genetic depletion of tumor TEMs resulted in a marked reduction in the frequency of Tregs in tumors. Taken together, our data suggest that ANGPT2-stimulated TEMs represent a novel, potent immunosuppressive force in tumors.