The accumulation of myeloid‐derived suppressor cells (MDSC) in tumor‐bearing hosts is a hallmark of malignancy‐associated inflammation and a major mediator for the induction of T cell suppression in cancer. MDSC can be divided phenotypically into granulocytic (G‐MDSC) and monocytic (Mo‐MDSC) subgroups. Several mechanisms mediate the induction of T cell anergy by MDSC; however, the specific role of these pathways in the inhibitory activity of MDSC subpopulations remains unclear. Therefore, we aimed to determine the effector mechanisms by which subsets of tumor‐infiltrating MDSC block T cell function. We found that G‐MDSC had a higher ability to impair proliferation and expression of effector molecules in activated T cells, as compared to Mo‐MDSC. Interestingly, both MDSC subgroups inhibited T cells through nitric oxide (NO)‐related pathways, but expressed different effector inhibitory mechanisms. Specifically, G‐MDSC impaired T cells through the production of peroxynitrites (PNT), while Mo‐MDSC suppressed by the release of NO. The production of PNT in G‐MDSC depended on the expression of gp91^phox and endothelial NO synthase (eNOS), while inducible NO synthase (iNOS) mediated the generation of NO in Mo‐MDSC. Deletion of eNOS and gp91^phox or scavenging of PNT blocked the suppressive function of G‐MDSC and induced anti‐tumoral effects, without altering Mo‐MDSC inhibitory activity. Furthermore, NO‐scavenging or iNOS knockdown prevented Mo‐MDSC function, but did not affect PNT production or suppression by G‐MDSC. These results suggest that MDSC subpopulations utilize independent effector mechanisms to regulate T cell function. Inhibition of these pathways is expected to specifically block MDSC subsets and overcome immune suppression in cancer.