Immunosuppression is a hallmark of tumor progression, and treatments that inhibit or deplete monocytic myeloid-derived suppressive cells could promote anti-tumor immunity. c-FLIP is a central regulator of caspase-8-mediated apoptosis and necroptosis. Here we show that low-dose cytotoxic chemotherapy agents cause apoptosis linked to c-FLIP down-regulation selectively in monocytes. Enforced expression of c-FLIP or viral FLIP rescues monocytes from cytotoxicity and concurrently induces potent immunosuppressive activity, in T cell cultures and in vivo models of tumor progression and immunotherapy. FLIP-transduced human blood monocytes can suppress graft versus host disease. Neither expression of FLIP in granulocytes nor expression of other anti-apoptotic genes in monocytes conferred immunosuppression, suggesting that FLIP effects on immunosuppression are specific to monocytic lineage and distinct from death inhibition. Mechanistically, FLIP controls a broad transcriptional program, partially by NF-κB activation. Therefore, modulation of FLIP in monocytes offers a means to elicit or block immunosuppressive myeloid cells.