Myeloid progenitor-derived suppressor cells (MDSCs) arise from myeloid progenitors and suppress both innate and adaptive immunity. MDSCs expand during the later phases of sepsis in mice, promote immunosuppression, and reduce survival. Here, we report that the myeloid differentiation-related transcription factor nuclear factor I-A (NFI-A) controls MDSC expansion during sepsis and impacts survival. Unlike MDSCs, myeloid cells with conditional deletion of the Nfia gene normally differentiated into effector cells during sepsis, cleared infecting bacteria, and did not express immunosuppressive mediators. In contrast, ectopic expression of NFI-A in myeloid progenitors from NFI-A myeloid cell-deficient mice impeded myeloid cell maturation and promoted immune repressor function. Importantly, surviving septic mice with conditionally deficient NFI-A myeloid cells were able to respond to challenge with bacterial endotoxin by mounting an acute inflammatory response. Together, these results support the concept of NFI-A as a master molecular transcriptome switch that controls myeloid cell differentiation and maturation and that malfunction of this switch during sepsis promotes MDSC expansion that adversely impacts sepsis outcome.