Lysosomal acid lipase (LAL) is essential for the hydrolysis of cholesteryl esters and triglycerides to generate cholesterol and free fatty acids in cellular lysosomes. Ablation of the lal gene (lal(-/-)) systemically increased expansion of cluster of differentiation molecule 11b (CD11b), lymphocyte antigen 6G (Ly6G) myeloid-derived suppressor cells (MDSCs) that caused myeloproliferative neoplasms in mice. Study of lal(-/-) bone marrow Ly6G(+) MDSCs via transcriptional profiling showed increases in mammalian target of rapamycin (mTOR) signaling pathway transcripts. Injection of mTOR pharmacologic inhibitors into lal(-/-) mice significantly reduced bone marrow myelopoiesis and systemic CD11b(+)Ly6G(+) cell expansion. Rapamycin treatment of lal(-/-) mice stimulated a shift from immature CD11b(+)Ly6G(+) cells to CD11b(+) single-positive cells in marrow and tissues and partially reversed the increased cell proliferation, decreased apoptosis, increased ATP synthesis, and increased cell cycling of bone marrow CD11b(+)Ly6G(+) cells obtained from lal(-/-) mice. Pharmacologic and siRNA suppression of mTOR, regulatory-associated protein of mTOR, rapamycin-insensitive companion of mTOR, and Akt1 function corrected CD11b(+)Ly6G(+) cell in lal(-/-) mice development from Lin(-) progenitor cells and reversed the immune suppression on T-cell proliferation and function in association with decreased reactive oxygen species production, and recovery from impairment of mitochondrial membrane potential compared with control mutant cells. These results indicate a crucial role of LAL-regulated mTOR signaling in the production and function of CD11b(+)Ly6G(+) cells. The mTOR pathway may serve as a novel target to modulate the emergence of MDSCs in those pathophysiologic states in which these cells play an immunosuppressive role.