Substantial evidence indicates that cancer-associated fibroblasts (CAFs) are critical components in the process of cancer progression. However, the role of CAFs in the immunopathogenesis of human cancer remains elusive. In this study, we demonstrate that purified colorectal carcinoma-derived fibroblasts exhibit activated phenotypes characterized by substantial α-smooth muscle actin expression. These CAFs sharply suppress natural killer (NK) cell functions in co-culture experiments. In contrast, normal skin fibroblasts had only a minimal effect on NK cell phenotype and function. Moreover, we demonstrated that prostaglandin E2 (PGE2) was released by fibroblasts in co-culture experiments. Thus, the functional modulation of NK cells by CAFs may represent a novel mechanism linking the pro-inflammatory response to immune tolerance within the tumor milieu.