Myeloid-derived suppressor cells (MDSCs) consist of monocytic (M-) MDSCs and polymorphonuclear (PMN-) MDSCs that contribute to an immunosuppressive environment in tumor-bearing hosts. However, research on the phenotypic and functional heterogeneity of MDSCs in tumor-bearing hosts and across different disease stage is limited. Here we subdivide M-MDSCs based on CD115 expression and report that CD115- M-MDSCs are functionally distinct from CD115+ M-MDSCs. CD115- M-MDSCs increased in bone marrow and blood as tumors progressed. Transcriptome analysis revealed that CD115- M-MDSCs expressed higher levels of neutrophil-related genes. Moreover, isolated CD115- M-MDSCs had higher potential to be differentiated into PMN-MDSCs compared with CD115+ M-MDSCs. Of note, CD115- M-MDSCs were able to differentiate into both olfactomedin 4 (OLFM4)hi and OLFM4lo PMN-MDSCs, whereas CD115+ M-MDSCs differentiated into a smaller proportion of OLFM4lo PMN-MDSCs. In vivo, M-MDSC to PMN-MDSC differentiation occurred most frequently in bone marrow while M-MDSCs preferentially differentiated into tumor-associated macrophages in the tumor mass. Our study reveals the presence of previously unrecognized subtypes of CD115- M-MDSCs in tumor-bearing hosts and demonstrates their cellular plasticity during tumorigenesis.