Natural killer cell lymphoma (NKCL) constitutes a rare and aggressive form of non-Hodgkin lymphoma, and there is little insight into its pathogenesis. Here we show that PRDM1 is a tumor suppressor gene in NKCLs that is inactivated by a combination of monoallelic deletion and promoter CpG island hypermethylation. We observed monoallelic deletion of PRDM1 loci in 8 of 18 (44%) NKCL cases. The other allele showed significant promoter methylation in 12 of 17 (71%) cases. In support of its role as a tumor suppressor gene, the reconstitution of PRDM1 in PRDM1-null NK cell lines led to G2/M cell cycle arrest, increased apoptosis, and a strong negative selection pressure with progressive elimination of PRDM1-expressing cells, which was enhanced when IL-2 concentration is limiting. We observed a progressive increase in PRDM1 expression--in particular, PRDM1α--in normal NK cells in response to IL-2 and in normal NK cells activated with an engineered NK cell target, K562-Cl9-mb21, suggesting its role in NK cell homeostasis. In support of this role, knockdown of PRDM1 by shRNA in normal NK cells resulted in the positive selection of these cells. We identified MYC and 4-1BBL as targets of PRDM1 in NK cells. Disruption of homeostatic control by PRDM1 may be an important pathogenetic mechanism for NKCL.