Avoiding destruction by immune cells is a hallmark of cancer, yet how tumors ultimately evade control by natural killer (NK) cells remains incompletely defined. Using global transcriptomic and flow-cytometry analyses and genetically engineered mouse models, we identified the cytokine-TGF-β-signaling-dependent conversion of NK cells (CD49a-CD49b+Eomes+) into intermediate type 1 innate lymphoid cell (intILC1) (CD49a+CD49b+Eomes+) populations and ILC1 (CD49a+CD49b-Eomesint) populations in the tumor microenvironment. Strikingly, intILC1s and ILC1s were unable to control local tumor growth and metastasis, whereas NK cells favored tumor immunosurveillance. Experiments with an antibody that neutralizes the cytokine TNF suggested that escape from the innate immune system was partially mediated by TNF-producing ILC1s. Our findings provide new insight into the plasticity of group 1 ILCs in the tumor microenvironment and suggest that the TGF-β-driven conversion of NK cells into ILC1s is a previously unknown mechanism by which tumors escape surveillance by the innate immune system.