CRACC is a self-associating member of the signaling lymphocytic activation molecule family that is expressed on cells of the immune system, including natural killer cells and activated T cells. Here we examine the function and mechanism of action of CRACC using several complementary approaches, including the generation of a CRACC-deficient mouse. Our results demonstrate that CRACC positively regulated natural killer cell functions by a mechanism dependent on the adaptor EAT-2 but not the related adaptor SAP. However, in the absence of EAT-2, CRACC potently inhibited natural killer cell function. CRACC was also inhibitory in T cells, which are typically devoid of EAT-2. Thus, CRACC can exert activating or inhibitory influences on cells of the immune system depending on cellular context and the availability of effector proteins.