Myeloid-derived suppressor cells (MDSCs), one of the major orchestrators of the immunosuppressive network, are associated with immune suppression and considered a prime target for cancer immunotherapy. At present, various strategies have been explored to deplete and/or inactivate MDSCs in vivo. In this study, we investigated the effect of arsenic trioxide (ATO) on MDSCs derived from tumor‑bearing mice. This study examined the in vitro and in vivo effects of ATO administration on MDSCs from C57/j mice bearing either the B16 or H22 tumor. The MDSCs were then characterized for phenotype, gene expression and function. Administration with ATO in vitro significantly induced MDSC differentiation, inhibited their proliferation and triggered apoptosis. Treatment with ATO in these murine tumor models significantly inhibited tumor growth and splenomegaly, decreased the percentages of MDSCs in the spleen, promoted their differentiation, reduced tumor necrosis factor-α and interleukin-10 levels and weakened the immune inhibition activity of MDSCs on T cells. In addition, we observed the underlying mechanism involved in the regulation of MDSCs by ATO, which included a panel of cytokines and signaling pathways. The findings showed the immunoregulatory effects of ATO by inducing apoptosis, promoting differentiation and inhibiting the function of MDSCs, suggesting that ATO has potential clinical benefit as it selectively attenuates MDSC-induced immunosuppression.