Abstract HOXA transcript antisense RNA myeloid-specific 1 (HOTAIRM1) is a long non-coding RNA (lncRNA) that plays a pivotal role in regulating myeloid cell development via targeting HOXA1 gene expression. We and others have previously shown that myeloid-derived suppressor cells (MDSCs), a heterogeneous population of immature myeloid cells, expand during chronic viral (HCV, HIV) infections. However, the role of HOTAIRM1 in the development and suppression of MDSCs during viral infection remains unknown. In this study, we demonstrate that the expressions of HOTAIRM1 and its target HOXA1 are substantially upregulated to promote the expressions of immunosuppressive molecules, including arginase 1, inducible nitric oxide synthase, signal transducer and activator of transcription 3, and reactive oxygen species, in CD33+ myeloid cells derived from hepatitis C virus (HCV)-infected patients. We show that HCV-associated exosomes (HCV-Exo) can modulate HOTAIRM1, HOXA1, and miR124 expressions to regulate MDSC development. Importantly, overexpression of HOTAIRM1 or HOXA1 in healthy CD33+ myeloid cells promoted the MDSC differentiation and suppressive functions; conversely, silencing of HOTAIRM1 or HOXA1 expression in MDSCs from HCV patients significantly reduced the MDSC frequency and their suppressive functions. In essence, these results indicate that the HOTAIRM1-HOXA1-miR124 axis enhances the differentiation and suppressive functions of MDSCs and may be a potential target for immunomodulation in conjunction with antiviral therapy during chronic viral infection.