Immune cells, including natural killer (NK) cells, recognize transformed cells and eliminate them in a process termed immunosurveillance. It is thought that tumor cells evade immunosurveillance by shedding membrane ligands that bind to the NKG2D-activating receptor on NK cells and/or T cells, and desensitize these cells. In contrast, we show that in mice, a shed form of MULT1, a high-affinity NKG2D ligand, causes NK cell activation and tumor rejection. Recombinant soluble MULT1 stimulated tumor rejection in mice. Soluble MULT1 functions, at least in part, by competitively reversing a global desensitization of NK cells imposed by engagement of membrane NKG2D ligands on tumor-associated cells, such as myeloid cells. The results overturn conventional wisdom that soluble ligands are always inhibitory and suggest a new approach for cancer immunotherapy.