Background: CAR T cell therapy can provide sustained remissions in patients with hematologic malignancies. However, some patients are resistant to or relapse after CAR T therapy. CAR T therapy is complicated by cytokine release syndrome (CRS) and immune effector cell-associated syndrome (ICANS). There is an unmet need to understand immune cell types and functions in correlation with clinical outcomes. Methods: Patients with hematologic malignancies treated with commercial CAR T products were enrolled in the study. Blood samples were collected at day -7 before lymphodepletion, day 0 before CAR T infusion, day +7 after CAR T infusion and then every 3-6 months thereafter. Multi-color flow cytometry was performed. Total myeloid-derived suppressor cells (MDSCs, CD45⁺CD3⁻CD19⁻CD20⁻CD56⁻CD16⁻HLA-DR⁻CD33⁺ CD11b⁺ cells), granulocytic (PMN)-MDSCs (CD14^-CD11b⁺CD15⁺), monocytic (M)-MDSCs (CD11b⁺CD14⁺HLA-DR^low/-CD15^-), early stage (e)-MDSCs (Lin^-HLA-DR^-CD11b⁺CD33⁺), CD3⁺, CD4⁺, CD8⁺ T cells, B cells, and NK cells were quantitated. T cell proliferation in response to CD3 and CD28 stimulation was measured by Ki67 labeling. The function of MDSCs in suppressing T cell proliferation was measured by co-culturing isolated MDSCs with T cells in the presence of anti-CD3/CD28 beads for 4 days. CRS, ICANS and treatment response at 3 months were determined and correlated with immune cell types and functional assays. Results: At the time of this abstract submission, we have enrolled 20 patients in the study: 11 patients received axicabtagene ciloleucel, 1 tisagenlecleucel, 4 brexucabtagene autoleucel, and 3 ciltacabtagene autoleucel. The median age at CAR-T infusion was 69 years old; 16 were male and 4 female. The number of CD4 and CD8 T cells recovered in 1 week after CAR T infusion and the number of NK cells increased at 3 months after CAR T therapy. Interestingly, MDSC numbers remained low at 3 months after CAR T infusion. We also measured the function of MDSCs in suppressing T cell proliferation. Before lymphodepletion, MDSCs were very suppressive. Following CAR-T, MDSCs become less suppressive, allowing CD8 T cell proliferation. We found that a lower level of PMN-MDSCs at day 0 and +7 correlated with the development of CRS (p = 0.003, p = 0.0005). Lower PMN-MDSCs and less suppressive MDSCs at day +7 were associated with the development of ICANS (p = 0.009, p < 0.0001). Higher percentage and proliferation of CD8 T cells and lower M-MDSCs at day +7 correlated with treatment response to CAR T therapy at 3 months (p = 0.02, p = 0.04, p = 0.0006). Conclusions: Our study shows the kinetics of immune cells and the function of MDSCs after CAR T therapy. Our preliminary data demonstrated a critical role of MDSCs in CAR T response and toxicities. Targeting MDSCs could be a novel approach for improving response in CAR T therapy.