Patients with cancer have an impaired T-cell response that can decrease the potential therapeutic benefit of cancer vaccines and other forms of immunotherapy. L-arginine (L-Arg) is a conditionally essential amino acid that is fundamental for the function of T lymphocytes. Recent findings in tumor-bearing mice and cancer patients indicate that increased metabolism of L-Arg by myeloid derived suppressor cells (MDSCs) producing arginase I inhibits T-lymphocyte responses. Here we discuss some of the most recent concepts how MDSC expressing arginase I may regulate T-cell function in cancer and other chronic inflammatory diseases and suggest possible therapeutic interventions to overcome this inhibitory effect.