Virus-infected cells can regulate non-permissive bystander cells, but the precise mechanisms remain incompletely understood. Here we report that this process can be mediated by transfer of viral RNA-loaded exosomes shed from infected cells to myeloid-derived suppressor cells (MDSCs), which in turn regulate the differentiation and function of T cells during viral infection. Specifically, we demonstrated that patients with chronic hepatitis C virus (HCV) infection exhibited significant increases in T follicular regulatory (TFR) cells and decreases in T follicular helper (TFH) cells. These MDSC-mediated T-cell dysregulations resulted in an increased ratio of TFR/TFH and IL-10 production in peripheral blood. Specifically, co-culture of MDSCs derived from HCV patients with healthy peripheral blood mononuclear cells (PBMCs) induced expansion of TFR, whereas depletion of MDSCs from PBMCs of HCV patients reduced the increases in TFR frequency and IL-10 production, and promoted the differentiation of IFN-γ-producing TFH cells. Importantly, we found that exosomes isolated from the plasma of HCV patients and supernatant of HCV-infected hepatocytes could drive monocytic myeloid cell differentiation into MDSCs. These exosomes were enriched in tetraspanins, such as CD63 and CD81, and contained HCV RNA, but exosomes isolated from patients with antiviral treatment contained no HCV RNA and could not induce MDSC differentiation. Notably, these HCV RNA-containing exosomes (HCV-Exo) were sufficient to induce MDSCs. Furthermore, incubation of healthy myeloid cells with these HCV-Exo inhibited the expression of miR−124, whereas reconstitution of PBMCs with miR−124 abolished the effects of HCV−Exo on MDSC induction. Taken together, these results indicate that HCV-associated exosomes can transfer immunomodulatory viral RNA from infected cells to neighboring immune cells and trigger MDSC expansion, which subsequently promotes TFR differentiation and inhibits TFH function. This study reveals a previously unrecognized path that represents a novel mechanism of immune dysregulation during chronic viral infection.