The field of immunotherapy for solid tumors, such as prostate cancer, has been recently focusing on therapies that can counter tumor-mediated immunosuppression. Precise quantification and characterization of the immune infiltrates in tumors is crucial to improve treatment efficacy. Natural killer (NK) cells, major components of the antitumor immune system, have never been isolated from prostate tumors, despite their suspected role in disease progression. Here, we examined the frequency, phenotype, and functions of NK cells infiltrating control and tumor prostate tissues. NK cell infiltrates in prostate tissues were mainly CD56 (NCAM1)-positive and displayed an unexpected immature, but activated, phenotype with low or no cytotoxic potential. Furthermore, we show that TGFβ1 (TGFB1) is highly secreted into the prostate environment and partly mediates the immunosuppressive effects on NK cells. In addition to this basal level of immunotolerance to NK cells, the prostate environment became further resistant to NK cell-mediated immunity upon cancer cell infiltration. Coculture experiments revealed that prostate cancer cells induced the expression of inhibitory receptor (ILT2/LILRB1) and downregulated the expression of activating receptors NKp46 (NCR1), NKG2D (KLRK1), and CD16 (FCGR3) by NK cells, thus preventing their recognition of tumor cells. Notably, blood levels of NKp46 were also decreased in prostate cancer patients and were inversely correlated with levels of prostate-specific antigen, the main prognostic factor in prostate cancer. Our study shows that a strong immunosuppressive environment impairs NK cell function at multiple levels in prostate cancer and provides a rationale for the design of therapies that restore NK cell efficiency in the prostate tumor microenvironment. Cancer Res; 76(8); 2153-65. ©2016 AACR.