Hepatocellular carcinoma (HCC) is the most common type of primary liver cancer. Transforming growth factor beta (TGF-β) is highly expressed in the liver tumor microenvironment and is known to inhibit immune cell activity. Here, we used human induced pluripotent stem cells (iPSCs) to produce natural killer (NK) cells engineered to mediate improved anti-HCC activity. Specifically, we produced iPSC-NK cells with either knockout TGF-β receptor 2 (TGFBR2-KO) or expression of a dominant negative (DN) form of the TGF-β receptor 2 (TGFBR2-DN) combined with chimeric antigen receptors (CARs) that target either GPC3 or AFP. The TGFBR2-KO and TGFBR2-DN iPSC-NK cells are resistant to TGF-β inhibition and improved anti-HCC activity. However, expression of anti-HCC CARs on iPSC-NK cells did not lead to effective anti-HCC activity unless there was also inhibition of TGF-β activity. Our findings demonstrate that TGF-β signaling blockade is required for effective NK cell function against HCC and potentially other malignancies that express high levels of TGF-β.