The development and function of natural killer (NK) cells is regulated by the interaction of inhibitory receptors of the Ly49 family with distinct peptide-laden major histocompatibility complex (MHC) class I molecules, although whether the Ly49 family is able bind to other MHC class I–like molecules is unclear. Here we found that the prototypic inhibitory receptor Ly49A bound the highly conserved nonclassical MHC class I molecule H2-M3 with an affinity similar to its affinity for H-2Dd. The specific recognition of H2-M3 by Ly49A regulated the 'licensing' of NK cells and mediated 'missing-self' recognition of H2-M3-deficient bone marrow. Host peptide–H2-M3 was required for optimal NK cell activity against experimental metastases and carcinogenesis. Thus, nonclassical MHC class I molecules can act as cognate ligands for Ly49 molecules. Our results provide insight into the various mechanisms that lead to NK cell tolerance.