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 in vitro 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.