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We demonstrate a novel tumor-promoting role of myeloid immune suppressor Gr+CD11b+ cells, which are evident in cancer patients and tumor-bearing animals. These cells constitute approximately 5% of total cells in tumors. Tumors coinjected with Gr+CD11b+ cells exhibited increased vascular density, vascular maturation, and decreased necrosis. These immune cells produce high levels of MMP9. Deletion of MMP9 in these cells completely abolishes their tumor-promoting ability. Gr+CD11b+ cells were also found to directly incorporate into tumor endothelium. Consistent with this observation, Gr+CD11b+ cells acquire endothelial cell (EC) properties in tumor microenvironment and proangiogenic culture conditions. Our data provide evidence that Gr+CD11b+ cells of immune origin induced by tumors directly contribute to tumor growth and vascularization by producing MMP9 and differentiating into ECs.