Avoiding destruction by immune cells is a hallmark of cancer, yet how tumors ultimately evade natural killer (NK) cell control remains incompletely defined. Using global transcriptomic and flow cytometric analyses and genetically engineered mouse models we describe the TGF-b signaling-dependent conversion of NK cells (CD49a-CD49b+Eomes+) into intermediate type 1 innate lymphoid (intILC1) cell (CD49a+CD49b+Eomes+) and ILC1 (CD49a+CD49b-Eomesint) cell populations in the tumor microenvironment. Strikingly, intILC1s/ILC1s were unable to control local tumor growth and metastasis, whereas NK cells favored tumor immune surveillance. Experiments using TNF-neutralizing antibodies suggested that innate immune escape was partially mediated by TNF-producing ILC1s. Our findings provide new insight to understanding the plasticity of group 1 ILC in the tumor microenvironment and suggest that the TGF-β-driven conversion of NK cells into ILC1s reveals a novel mechanism by which tumors escape innate immune surveillance.