Although novel anti-myeloma agents have been developed, multiple myeloma (MM) is still an incurable disease. The growth of MM cells highly depends on the bone marrow (BM), where cellular components and soluble factors cooperatively orchestrate the pro-survival and immunosuppressive microenvironment. Tumor-promoting inflammation and avoiding immune destruction are hallmarks of cancer, however the molecular and cellular mechanisms of MM-associated inflammation and immunosuppression remain poorly understood. Here, we demonstrate that the pro-inflammatory cytokine IL-18 is critically involved in these hallmarks in MM. Using Vk*MYC preclinical mouse models, a comprehensive analysis of the transcriptional landscape of the immune microenvironment in MM patients, and BM cytokine analyses, we demonstrate that dysregulated production of IL-18 is a key driving force for immunosuppression in the MM microenvironment and a potential therapeutic target. Mice deficient for IL-18 were remarkably protected from Vk*MYC MM progression in a CD8+ T cell-dependent manner. The MM-niche derived IL-18 drove generation of myeloid-derived suppressor cells (MDSCs), leading to accelerated disease progression. A global transcriptome analysis of the immune microenvironment in 73 MM patients strongly supported the negative impact of IL-18-driven MDSCs on T cell responses. Strikingly, high levels of bone marrow plasma IL-18 were associated with poor overall survival in MM patients. Our results reveal the critical role of IL-18 in the MM immunopathology, which provides insight into therapeutic strategies against MM.