Monoclonal antibodies (mAb) are used to treat solid and hematological malignancies, and work in part through Fc receptors (FcR) on natural killer cells (NK). However, FcR mediated functions of NK cells from cancer patients are significantly impaired. Identifying the mechanisms of this dysfunction and impaired response to mAb therapy could lead to combination therapies and enhance mAb therapy.  Experimental Design: Co-cultures of autologous NK cells and MDSC from cancer patients were used to study the effect of MDSC on NK cell FcR mediated functions including antibody dependent cellular cytotoxicity, cytokine production, and signal transduction in vitro. Mouse breast cancer models were utilized to study the effect of MDSC on antibody therapy in vivo and test the efficacy of combination therapies including a mAb and a MDSC targeting agent.  Results: Cancer patient MDSC were found to significantly inhibit NK cell FcR mediated functions including ADCC, cytokine production, and signal transduction in a contact independent manner. In addition, adoptive transfer of MDSC abolished the efficacy of mAb therapy in a mouse model of pancreatic cancer. Inhibition of iNOS restored NK cell functions and signal transduction. Finally, non-specific elimination of MDSC or inhibition of iNOS in vivo significantly improved the efficacy of mAb therapy in a mouse model of breast cancer.