Daratumumab (Dara), a multiple myeloma (MM) therapy, is an antibody against the surface receptor CD38, which is expressed not only on plasma cells but also on NK cells and monocytes. Correlative data have highlighted the immune-modulatory role of Dara, despite the paradoxical observation that Dara regimens decrease the frequency of total NK cells. Here we show that, despite this reduction, NK cells play a pivotal role in Dara anti-MM activity. CD38 on NK cells is essential for Dara-induced immune modulation, and its expression is restricted to NK cells with effector function. We also show that Dara induces rapid CD38 protein degradation associated with NK cell activation, leaving an activated CD38-negative NK cell population. CD38+ NK cell targeting by Dara also promotes monocyte activation, inducing an increase in T-cell costimulatory molecules (CD86/80) and enhancing anti-MM phagocytosis activity ex vivo and in vivo. In support of Dara's immunomodulating role, we show that MM patients that discontinued Dara therapy because of progression maintain targetable unmutated surface CD38 expression on their MM cells, but retain effector cells with impaired cellular immune function. In summary, we report that CD38+ NK cells may be an unexplored therapeutic target for priming the immune system of MM patients.