Myeloid derived suppressor cells (MDSCs) are a population of immature myeloid cells that suppress adaptive immune function, yet the factors that regulate their suppressive function in patients with infection remain unclear. We studied MDSCs in patients with leprosy, a disease caused by Mycobacterium leprae, where clinical manifestations present on a spectrum that correlate with immunity to the pathogen. We found that HLA-DR^-CD33⁺CD15⁺ MDSCs were increased in blood from patients with disseminated/progressive lepromatous leprosy and possessed T cell-suppressive activity as compared with self-limiting tuberculoid leprosy. Mechanistically, we found ER stress played a critical role in regulating the T cell suppressive activity in these MDSCs. Furthermore, ER stress augmented IL-10 production, contributing to MDSC activity, whereas IFN-γ allowed T cells to overcome MDSC suppressive activity. These studies highlight a regulatory mechanism that links ER stress to IL-10 in mediating MDSC suppressive function in human infectious disease.