Previously, we showed that 2B4 is a dominant inhibitory receptor in SHIP-deficient NK cells that prevents efficient cytolysis of complex targets. We show in this study that 2B4 deficiency restores homeostatic control and cytolytic function to SHIP-deficient NK cells. However, 2B4(-/-)SHIP(-/-) NK cells still exhibit a profound disruption of their NK receptor repertoire and are compromised for induction of IFN-gamma by several NK-activating receptors, including NKp46, NK.1.1, and NKG2D. In addition, we find that 2B4(-/-) NK cells have an extensively disrupted repertoire, including a supernormal frequency of NKp46(+) NK cells. Consequently IFN-gamma is induced on a much higher percentage of 2B4(-/-) NK cells following engagement of NKp46. We also find that both SHIP and 2B4 are required to prevent expression of Ly49B, a myeloid lineage MHC class I receptor not normally expressed by the NK lineage. Finally, when SHIP-deficient NK cells are on an H-2(d) background, they exhibit supernormal levels of Ly49A and possess normal cytolytic function against MHC-matched tumor targets and enhanced cytolysis of MHC mismatched tumor targets. However, despite normal or elevated cytolytic function, H2d SHIP(-/-) NK cells exhibit poor induction of IFN-gamma like their H2b(+) or 2B4(-/-) counterparts, demonstrating a uniform requirement for SHIP in induction of IFN-gamma downstream of key NK activating receptors. These findings reveal a complex interplay of SHIP, 2B4, and MHC in the regulation of homeostasis, effector function, and repertoire formation in the NK cell lineage.