NK cells are critical for the innate immune control of poxviral infections. Previous studies have shown that NK cells are efficiently activated in response to infection with vaccinia virus (VV), the most studied member of the poxvirus family. However, it remains unknown whether the activation of NK cells in response to VV infection is tightly regulated. In this study, we showed that myeloid-derived suppressor cells (MDSCs) rapidly accumulated at the site of VV infection. In vivo depletion of MDSCs led to enhanced NK cell proliferation, activation, and function in response to VV infection. This was accompanied by an increase in mortality and systemic IFN-γ production. We further demonstrated that the granulocytic-MDSC (G-MDSC) subset was responsible for the suppression on NK cells and that this suppression was mediated by reactive oxygen species. These results indicate that G-MDSCs can negatively regulate NK cell activation and function in response to VV infection and suggest that manipulation of G-MDSCs could represent an attractive strategy for regulating NK cell activities for potential therapeutic benefits.