Myeloid-derived suppressor cells (MDSCs) accumulate in cancer patients and tumor-bearing mice, subsequently suppressing the host immune system. MDSCs represent a group of immature myeloid cells expressing CD11b and Gr-1. Here, we show that a Toll-like receptor (TLR) agonist, resiquimod, which binds to TLR7 and TLR8, induces the differentiation of MDSCs into mature myeloid cells. MDSCs were isolated from mice bearing mammary carcinoma 4T1 cells, and the purified MDSCs were cultured in the presence of resiquimod for 5 days. Phenotypic analysis showed that the resiquimod-treated MDSCs differentiated into $F4/80^+$ macrophages and $CD11c^+/I-Ad^{d+}$ dendritic cells. Functional analysis showed that the MDSCs also lost their suppressive activity on T cells. Resiquimod-treated MDSCs significantly enhanced the proliferation of T cells that were treated with anti-CD3 and anti-CD28 monoclonal antibodies. These results show that resiquimod induces the differentiation of MDSCs into macrophages and dendritic cells, and also suggest that resiquimod may improve cancer immunotherapy by reducing immunosuppressive MDSCs.