Background: Multiple Myeloma (MM) is an incurable plasma cell malignancy residing within the bone marrow (BM). We aim to develop allogeneic Natural Killer (NK) cell immunotherapy for MM. As the BM contains hypoxic regions and the tumor environment can be immunosuppressive, we hypothesized that hypoxia inhibits NK cell anti-MM responses. Methods: NK cells were isolated from healthy donors by negative selection and NK cell function and phenotype were examined at oxygen levels representative of hypoxic BM using flowcytometry. Additionally, NK cells were activated with IL-2 to enhance NK cell cytotoxicity under hypoxia. Results: Hypoxia reduced NK cell killing of MM cell lines in an oxygen dependent manner. Under hypoxia, NK cells maintained their ability to degranulate in response to target cells, though, the percentage of degranulating NK cells was slightly reduced. Adaptation of NK- or MM cells to hypoxia was not required, hence, the oxygen level during the killing process was critical. Hypoxia did not alter surface expression of NK cell ligands (HLA-ABC, -E, MICA/B and ULBP1-2) and receptors (KIR, NKG2A/C, DNAM-1, NCRs and 2B4). It did, however, decrease expression of the activating NKG2D receptor and of intracellular perforin and granzyme B. Pre-activation of NK cells by IL-2 abrogated the detrimental effects of hypoxia and increased NKG2D expression. This emphasized that activated NK cells can mediate anti-MM effects, even under hypoxic conditions. Conclusions: Hypoxia abolishes the killing potential of NK cells against multiple myeloma, which can be restored by IL-2 activation. Our study shows that for the design of NK cell-based immunotherapy it is necessary to study biological interactions between NK- and tumor cells also under hypoxic conditions.