Natural killer (NK) cells are an important component of anti-cancer immunity, and their activity is regulated by an array of activating and inhibitory receptors. In mice, the inhibitory NKR-P1B receptor is expressed in NK cells and recognizes the C-type lectin-related protein-b (Clr-b) ligand. NKR-P1B:Clr-b interactions represent a 'missing-self' recognition system to monitor cellular levels of Clr-b on healthy and diseased cells. Here, we report an important role for NKR-P1B:Clr-b interactions in tumor immunosurveillance in MMTV-PyVT mice, which develop spontaneous mammary tumors. MMTV-PyVT mice on NKR-P1B-deficient genetic background developed mammary tumors earlier than on wild-type (WT) background. A greater proportion of tumor-infiltrating NK cells downregulate expression of the transcription factor Eomesodermin (EOMES) in NKR-P1B-deficient mice compared to WT mice. Tumor-infiltrating NK cells also downregulated CD49b expression but gain CD49a expression and exhibit effector functions, such as granzyme B upregulation and proliferation in mammary tumors. However, unlike the EOMES NK cells, the EOMES NK cell subset is unable to respond to further stimulation and exhibits phenotypic alterations associated with immune dysfunction. These alterations included increased expression of PD-1, LAG-3, and TIGIT and decreased expression of NKp46, Ly49C/I, CD11b, and KLRG-1. Furthermore, tumor-infiltrating NKR-P1B-deficient NK cells exhibited an elevated dysfunctional immune phenotype compared to WT NK cells. These findings demonstrate that the NKR-P1B receptor plays an important role in mammary tumor surveillance by regulating anti-cancer immune responses and functional homeostasis in NK cells.