Oncolytic viruses (OVs) have become a category of promising anticancer immunotherapeutic agents over the last decade. However, the fact that many individuals fail to respond to OVs highlights the importance of defining the barely known immunosuppressive mechanisms that lead to treatment resistance. Here we found that the immunosuppression mediated by tumor-associated myeloid cells (TAMCs) directly quenches the antitumor effect of oncolytic virus M1 (OVM). OVM induces myeloid cells to migrate into tumors and strengthens their immunosuppressive phenotypes. Mechanically, tumor cells treated with OVM secrete interleukin-6 (IL-6) to activate the phosphatidylinositol 3-kinase (PI3K)-γ/Akt axis in TAMCs, promoting infiltration of TAMCs and aggravating their inhibition on cytotoxic CD8⁺ T lymphocytes. Pharmacologically targeting PI3K-γ relieves TAMC-mediated immunosuppression and enhances the efficacy of OVM. Additional treatment with immune checkpoint antibodies eradicates multiple refractory solid tumors and induces potent long-term antitumor immune memory. Our findings indicate that OVM functions as a double-edged sword in antitumor immunity and provide insights into the rationale for liberating T cell-mediated antitumor activity by abolishing TAMC-mediated immunosuppression.