Myeloid-derived suppressor cells (MDSCs) are a heterogeneous population of immature cells that expand during benign and cancer-associated inflammation and are characterized by their ability to inhibit T cell immunity. Increased metabolism of l-Arginine (l-Arg), through the enzymes arginase 1 and NO synthase 2 (NOS2), is well documented as a major MDSC suppressive mechanism. Therefore, we hypothesized that restricting MDSC uptake of l-Arg is a critical control point to modulate their suppressor activity. Using murine models of prostate-specific inflammation and cancer, we have identified the mechanisms by which extracellular l-Arg is transported into MDSCs. We have shown that MDSCs recruited to localized inflammation and tumor sites upregulate cationic amino acid transporter 2 (Cat2), coordinately with Arg1 and Nos2. Cat2 expression is not induced in MDSCs in peripheral organs. CAT2 contributes to the transport of l-Arg in MDSCs and is an important regulator of MDSC suppressive function. MDSCs that lack CAT2 have significantly reduced suppressive ability ex vivo and display impaired capacity for regulating T cell responses in vivo as evidenced by increased T cell expansion and decreased tumor growth in Cat2(-/-) mice. The abrogation of suppressive function is due to low intracellular l-Arg levels, which leads to the impaired ability of NOS2 to catalyze l-Arg-dependent metabolic processes. Together, these findings demonstrate that CAT2 modulates MDSC function. In the absence of CAT2, MDSCs display diminished capacity for controlling T cell immunity in prostate inflammation and cancer models, where the loss of CAT2 results in enhanced antitumor activity.