Type I interferon (IFN) is crucial in host antiviral defense. Previous studies have described the pleiotropic role of type I IFNs on innate and adaptive immune cells during viral infection. Here, we demonstrate that natural killer (NK) cells from mice lacking the type I IFN-α receptor (Ifnar^−/−) or STAT1 (which signals downstream of IFNAR) are defective in expansion and memory cell formation after mouse cytomegalovirus (MCMV) infection. Despite comparable proliferation, Ifnar^−/− NK cells showed diminished protection against MCMV infection and exhibited more apoptosis compared with wild-type NK cells. Furthermore, we show that Ifnar^−/− NK cells express increased levels of NK group 2 member D (NKG2D) ligands during viral infection and are susceptible to NK cell–mediated fratricide in a perforin- and NKG2D-dependent manner. Adoptive transfer of Ifnar^−/− NK cells into NK cell–deficient mice reverses the defect in survival and expansion. Our study reveals a novel type I IFN–dependent mechanism by which NK cells evade mechanisms of cell death after viral infection.