Abstract NK cells are the first line of defense against infected and transformed cells. Defective NK cell activity was shown to increase susceptibility for viral infections and reduce tumor immune-surveillance. With age, the incidence of infectious diseases and malignancy rises dramatically, suggesting that impaired NK cell function might contribute to disease in these individuals. We found an increased frequency of NK cells with high expression of the inhibitory killer cell lectin-like receptor G1 (KLRG1) in individuals >70 y. The role of KLRG1 in ageing is not known, and the mechanism of KLRG1-induced inhibition of NK cell function is not fully understood. We report that NK cells with high KLRG1 expression spontaneously activate the metabolic sensor AMP-activated protein kinase (AMPK) and that activation of AMPK negatively regulates NK cell function. Pre-existing AMPK activity is further amplified by ligation of KLRG1 in these cells, which leads to internalization of the receptor and allows interaction with AMPK. We show that KLRG1 activates AMPK by preventing its inhibitory dephosphorylation by protein phosphatase-2C rather than inducing de novo kinase activation. Finally, inhibition of KLRG1 or AMPK prevented KLRG1-induced activation of AMPK and reductions in NK cell cytotoxicity, cytokine secretion, proliferation, and telomerase expression. This novel signaling pathway links metabolic sensing, effector function, and cell differentiation with inhibitory receptor signaling that may be exploited to enhance NK cell activity during ageing.