PD-1 blocking agents have achieved significant success as anti-cancer therapeutics. The mechanism(s) of how PD-1 compromises anti-tumor function remain poorly understood. We generated an antibody that recognizes PD-1pY248 that is required for PD-1 inhibitory signaling. In three mouse tumor models, we identified PD-1 expression and phosphorylation in CD4+ and CD8+ T cells of the tumor microenvironment (TME) but more prominently in myeloid cells. These findings prompted us to examine the role of PD-1 in myeloid cell differentiation and function in cancer immunity. The rapid change in hematopoietic cell output that occurs in response to immunologic stress is known as “emergency” myelopoiesis”. During continuous low-level stimulation mediated by cancer-derived factors, common myeloid progenitors (CMP) and granulocyte/macrophage progenitors (GMP), undergo modest but continuous expansion with hindered differentiation leading to the output of immature myeloid-derived suppressor cells (MDSC). We analyzed the myeloid compartment of tumor-bearing mice and determined that myeloid cells that expand during cancer-driven emergency myelopoiesis express PD- 1 and PD-L1. Using PD-1 KO mice or WT mice treated with PD-1 blocking antibody we determined that PD-1 deletion or blockade prevented the accumulation of immature myeloid progenitor cells and stimulated differentiation and output of Ly6Chi effector monocytes, macrophages and dendritic cells (DC). To determine whether these outcomes were mediated by a myeloid-intrinsic impact of PD-1 ablation or by the effects of PD- 1neg T cells on myeloid cells, we generated mice with conditional targeting of the Pdcd1 gene (PD-1f/f) and selectively eliminated PD-1 in myeloid cells or T cells. Compared to T cell-specific, myeloid cell-specific PD-1 ablation more effectively decreased tumor growth. Cancer-driven emergency myelopoiesis was differentially affected. Both myeloid-specific and T cell-specific PD-1 ablation resulted in expansion and accumulation of CMP but only myeloid-specific PD-1 ablation prevented the accumulation of GMP and switched the myeloid cell fate from MDSCs to differentiated effector monocytes, macrophages, DC. Our findings reveal a previously unidentified role of the PD-1: PD-L1 pathway and support the novel hypothesis that switch of myeloid cell fate commitment might be a key mechanism by which PD-1 blockade mediates its anti-tumor function. To investigate this, we will pursue the following specific aims to determine: 1. How PD-1 signaling mediates lineage fate determination of myeloid progenitor cells in response to emergency myelopoiesis. 2. How PD-1 targeting impacts the metabolic and epigenetic program of myeloid cells. 3. How PD-1 affects anti-tumor immunity by regulating the crosstalk between innate and tumor- associated T cells.