Natural killer (NK) cells can have potent antileukemic activity following haplo-mismatched, T cell-depleted stem cell transplantations for the treatment of acute myeloid leukemia (AML), but they are not successful in eradicating de novo AML. Here, we have used a mouse model of de novo AML to elucidate the mechanisms by which AML evades NK cell surveillance. NK cells in leukemic mice displayed a marked reduction in the cytolytic granules perforin and granzyme B. Further, as AML progressed, we noted the selective loss of an immature subset of NK cells in leukemic mice and in AML patients. This absence was not due to elimination by cell death or selective reduction in proliferation, but rather to the result of a block in NK cell differentiation. Indeed, NK cells from leukemic mice and humans with AML showed lower levels of TBET and EOMES, transcription factors that are critical for terminal NK cell differentiation. Further, the microRNA miR-29b, a regulator of T-bet and EOMES, was elevated in leukemic NK cells. Finally, deletion of miR-29b in NK cells reversed the depletion of this NK cell subset in leukemic mice. These results indicate that leukemic evasion of NK cell surveillance occurs through miR-mediated dysregulation of lymphocyte development, representing an additional mechanism of immune escape in cancer.