Signaling lymphocytic activation molecule F7 (SLAMF7) is a receptor present on immune cells, including natural killer (NK) cells. It is also expressed on multiple myeloma (MM) cells. This led to development of an anti-SLAMF7 antibody, elotuzumab, showing efficacy against MM. SLAMF7 mediates activating or inhibitory effects in NK cells, depending on whether cells express or do not express the adaptor EAT-2. Since MM cells lack EAT-2, we elucidated the inhibitory effectors of SLAMF7 in EAT-2-negative NK cells and tested whether these effectors were triggered in MM cells. SLAMF7-mediated inhibition in NK cells lacking EAT-2 was mediated by SH2 domain-containing inositol phosphatase 1 (SHIP-1), which was recruited via tyrosine 261 of SLAMF7. Coupling of SLAMF7 to SHIP-1 required Src kinases, which phosphorylated SLAMF7. Although MM cells lack EAT-2, elotuzumab did not induce inhibitory signals in these cells. This was at least partly due to a lack of CD45, a phosphatase required for Src kinase activation. A defect in SLAMF7 function was also observed in CD45-deficient NK cells. Hence, SLAMF7-triggered inhibition is mediated by a mechanism involving Src kinases, CD45, and SHIP-1 that is defective in MM cells. This defect might explain why elotuzumab eliminates MM cells by an indirect mechanism involving the activation of NK cells.