Natural killer (NK) cells have a vital role in killing hepatocellular carcinoma (HCC) cells; however, the mechanism underlying tumor-infiltrating NK (TINK)-cell dysfunction remains poorly understood. Using flow cytometry staining, we precisely characterized the frequency, phenotype and function of NK subsets distinguished by CD27 and CD11b in 30 patients with HCC in comparison to 30 healthy controls. Interestingly, we found a substantial proportion of liver-infiltrating CD11b-CD27- (DN) NK subsets in tumor tissue from HCC patients. Remarkably, these relatively expanded DN NK subsets exhibited an inactive and immature phenotype. By detecting the expression of CD107a and interferon-gamma (IFN-γ) on NK subsets and NK cells, we demonstrated that DN NK subsets exhibited a poor cytotoxic capacity and deficient potential to produce IFN-γ in comparison to the other three subsets, which contributed to the dysfunction of TINK cells in HCC patients. In addition, we found that the presence of DN NK cells was closely associated with the clinical outcomes of HCC patients, as the frequency of DN NK cells among TINK cells was positively correlated with tumor stage and size. A large percentage of DN NK cells among TINK cells was an independent prognostic factor for lower survival in the 60-month follow-up period. In conclusion, a substantial proportion of CD11b-CD27-NK subsets among TINK cells accounts for NK-cell dysfunction in patients with HCC and is associated with tumor progression. Our study may provide a novel therapeutic target for the treatment of patients with HCC.