The NK killing activity is regulated by activating and inhibitory NK receptors. All of the activating ligands identified so far are either viral or stress-induced proteins. The class I MHC proteins are the ligands for most of the inhibitory NK receptors. However, in the past few years, several receptors have been identified that are able to inhibit NK killing independently of class I MHC recognition. We have previously demonstrated the existence of a novel inhibitory mechanism of NK cell cytotoxicity mediated by the homophilic carcinoembryonic Ag (CEA)-related cell adhesion molecule 1 (CEACAM1) interactions. In this study, we demonstrate that CEACAM1 also interacts heterophilically with the CEA protein. Importantly, we show that these heterophilic interactions of CEA and CEACAM1 inhibit the killing by NK cells. Because CEA is expressed on a wide range of carcinomas and commonly used as tumor marker, these results represent a novel role for the CEA protein enabling the escape of tumor cells from NK-mediated killing. We further characterize, for the first time, the CEACAM1-CEA interactions. Using functional and binding assays, we demonstrate that the N domains of CEACAM1 and CEA are crucial but not sufficient for both the CEACAM1-CEACAM1 homophilic and CEACAM1-CEA heterophilic interactions. Finally, we suggest that the involvement of additional domains beside the N domain in the heterophilic and homophilic interactions is important for regulating the balance between cis and trans interactions.