Natural killer (NK) cell function is negatively regulated by inhibitory receptors interacting with major histocompatibility complex class I molecules expressed on target cells. Here we show that the inhibitory Ly49A NK cell receptor not only binds to its H-2Dd ligand expressed on potential target cells (in trans) but also is constitutively associated with H-2Dd in cis (on the same cell). Cis association and trans interaction occur through the same binding site. Consequently, cis association restricts the number of Ly49A receptors available for binding of H-2Dd on target cells and reduces NK cell inhibition through Ly49A. By lowering the threshold at which NK cell activation exceeds NK cell inhibition, cis interaction allows optimal discrimination of normal and abnormal host cells.