Abstract Up to 90% of hepatocellular carcinoma (HCC) cases are preceded by chronic liver disease and cirrhosis in which the major histopathologic feature is hepatic fibrosis (HF), or the excessive accumulation collagen fibers in the liver stroma. These fibers are deposited by activated hepatic stellate cells (hSTEL) in response to hepatitis infection, and alcohol liver disease (ALD). Both HF and subsequent HCC are associated with local and systemic suppression of natural killer (NK) cells, which normally serve to clear over-activated hSTELL and de novo HCC. While NK dysfunction has been studied independently in HF and HCC, neither field has considered a common mechanism caused by changes in the local microenvironment. Cells interact with collagen through a subset of integrins, or one of four known receptors that possess either activating or inhibitory function. One of these receptors, known as leukocyte-associated immunoglobulin-like receptor 1 (LAIR-1), contains an immunotyrosine-based inhibitory motif (ITIM), elicits inhibitory signaling in lymphocytes, and is highly expressed on NK cells. We observed increased expression of LAIR-1 on dividing primary human NK cells, and found that bioartifical collagen matrix significantly inhibits NK proliferation in a dose-dependent manner in response to IL-2. In contrast, NK cells isolated from LAIR-1 germline knockout mice displayed near complete resistance to collagen-induced suppression in similar proliferation assays. This led us to hypothesize that the accumulation of hSTEL-derived collagen directly inhibits NK activity and protects both hSTEL and HCC from innate clearance. We demonstrate that the deposition of native collagen matrix by hSTELs imparts a significant protective effect from subsequent NK lysis in standard 51Cr-release cytotoxicity assays. A HCC cell line (HEPG2), which produces no collagen in the absence of hSTELs, is susceptible to activated NK killing and is unaffected by collagenase. To test if hSTEL-derived collagen cross-protects bystander HEPG2 cells, we developed a novel flow cytometry-based duel-target cytotoxicity assay capable of measuring the simultaneous killing of multiple targets. Primary hSTEL and HEPG2 cells were pre-labeled with different lipophilic dyes and co-cultured for 72h, resulting in an accurate analogue of the HCC microenvironment including HEPG2 nodules, interstitial hSTEL, and a complex intersecting network of fibrillar collagen. Using this co-culture system, we show that hSTEL-derive collagen matrix protects both hSTEL and HEPG2 targets from NK cytotoxicity. Pretreatment of the co-culture system with collagenase removes the protective collagen matrix and restores NK cytotoxicity. These results suggest that hSTEL-derived collagen may contribute to NK dysfunction in LF and HCC, and identifies LAIR-1 as a potential mediator of collagen-induced immune suppression. Citation Format: Adam W. Mailloux, Pearlie K Epling-Burnette. Collagen matrix deposition by hepatic stellate cells protects hepatocellular carcinoma from NK-mediated cytotoxicity. [abstract]. In: Proceedings of the 105th Annual Meeting of the American Association for Cancer Research; 2014 Apr 5-9; San Diego, CA. Philadelphia (PA): AACR; Cancer Res 2014;74(19 Suppl):Abstract nr 1670. doi:10.1158/1538-7445.AM2014-1670