HIV/CMV co-infected persons despite prolonged viral suppression often experience persistent immune activation, have an increased frequency of myeloid derived suppressor cells (MDSC) and are at increased risk for cardiovascular disease. We examined how HIV MDSC control CD4+ T cell IFNγ response to a CMVpp65 peptide pool (CMVpp65). We show that HIV/CMV co-infected persons with virologic suppression and recovered CD4+ T cells compared to HIV(-)/CMV(+) controls exhibit an increase in CD4+CX3CR1+IFNγ+ cells in response to CMVpp65; MDSC depletion further augmented CD4+CX3CR1+IFNγ+ cells and IFNγ production. IL-2 and IFNγ in response to CMVpp65 were enhanced with depletion of MDSC expanded in presence of HIV (HIV MDSC), but decreased with culture of HIV MDSC with autologous PBMCs. CMVpp65 specific CD4+CX3CR1+IFNγ+ cells were also decreased in presence of HIV MDSC. HIV MDSC overexpressed B7-H4 and silencing B7-H4 increased the production of IL-2 and IFNγ from autologous cells; a process mediated through increased phosphorylated (p)-Akt upon stimulation with CMVpp65. Additionally, IL-27 regulated the expression of B7-H4 on HIV MDSC, and controlled CMV-specific T cell activity by limiting CMVpp65-IFNγ production and expanding CD4+IL-10+ regulatory T cells. These findings provide new therapeutic targets to control the chronic immune activation and endothelial cell inflammation observed in HIV-infected persons.