Natural killer (NK) cells are potent anti-viral and antitumor “first responders” endowed with natural cytotoxicity and cytokine production capabilities. To date, attempts to translate these promising biologic functions through the adoptive transfer of NK cells for the treatment of cancer have been of limited benefit. Here we trace the fate of adoptively transferred murine NK cells and make the surprising observation that NK cells traffic to tumor sites yet fail to control tumor growth or improve survival. This dysfunction is related to a rapid down-regulation of activating receptor expression and loss of important effector functions. Loss of interferon (IFN)γ production occurs early after transfer, whereas loss of cytotoxicity progresses with homeostatic proliferation and tumor exposure. The dysfunctional phenotype is accompanied by down-regulation of the transcription factors Eomesodermin and T-bet, and can be partially reversed by the forced overexpression of Eomesodermin. These results provide the first demonstration of NK-cell exhaustion and suggest that the NK-cell first-response capability is intrinsically limited. Further, novel approaches may be required to circumvent the described dysfunctional phenotype.