Nonmagnetic disorder is shown to quench the screening of magnetic moments in metals, the Kondo effect. The probability that a magnetic moment remains free down to zero temperature is found to increase with disorder strength. Experimental consequences for disordered metals are studied. In particular, it is shown that the presence of magnetic impurities with a small Kondo temperature enhances the electron's dephasing rate at low temperatures in comparison to the clean metal case. It is furthermore proven that the width of the distribution of Kondo temperatures remains finite in the thermodynamic (infinite volume) limit due to wave function correlations within an energy interval of order 1/τ , where τ is the elastic scattering time. When time-reversal symmetry is broken either by applying a magnetic field or by increasing the concentration of magnetic impurities, the distribution of Kondo temperatures becomes narrower.