Immunotherapies have had unprecedented success in the treatment of multiple cancer types, albeit with variable response rates. Unraveling the complex network of immune cells within the tumor microenvironment (TME) may provide additional insights to enhance antitumor immunity and improve clinical response. Many studies have shown that NK cells or innate lymphoid cells (ILC) have regulatory capacity. Here, we identified CD103 as a marker that was found on CD56+ cells that were associated with a poor proliferative capacity of tumor-infiltrating lymphocytes in culture. We further demonstrated that CD103+CD56+ ILCs isolated directly from tumors represented a distinct ILC population that expressed unique surface markers (such as CD49a and CD101), transcription factor networks, and transcriptomic profiles compared with CD103-CD56+ NK cells. Using single-cell multiomic and spatial approaches, we found that these CD103+CD56+ ILCs were associated with CD8+ T cells with reduced expression of granzyme B. Thus, this study identifies a population of CD103+CD56+ ILCs with potentially inhibitory functions that are associated with a TME that includes CD8+ T cells with poor antitumor activity. Further studies focusing on these cells may provide additional insights into the biology of an inhibitory TME.