TNF and TNF receptor type 2 (TNFR2) have been shown to be important for generation of myeloid-derived suppressor cells (MDSC). In order to analyze whether and how TNFR2 passes the effect of TNF on, myeloid cells from TNFR2-deficient mice were compared to respective cells from wild-type mice. Primary TNFR2-deficient myeloid cells showed reduced production of NO and IL-6 which was attributable to CD11b+ CD11c− Ly6C+ Ly6G− immature monocytic MDSC. TNFR2-deficient MDSC isolated from bone marrow were less suppressive for T cell proliferation compared to WT-derived MDSC. These differences on myeloid cells between the two mouse lines were still observed after co-culture of bone marrow cells from the two mouse lines together during myeloid cell differentiation, which demonstrated that the impaired functional capacity of TNFR2-deficient cells was independent of soluble factors but required membrane expression of TNFR2. Similarly, adoptive transfer of TNFR2-deficient bone marrow cells into wild-type hosts did not rescue the TNFR2-specific phenotype of bone marrow-derived myeloid cells. Therefore, membrane TNFR2 expression determines generation and function of monocytic MDSC.