Monoclonal gammopathy of undetermined significance (MGUS) is a common disorder of aging and a precursor lesion to full-blown multiple myeloma (MM). The mechanisms underlying the progression from MGUS to MM are incompletely understood but include the suppression of innate and adaptive antitumor immunity. Here, we demonstrate that NKG2D, an activating receptor on natural killer (NK) cells, CD8⁺ T lymphocytes, and MHC class I chain-related protein A (MICA), an NKG2D ligand induced in malignant plasma cells through DNA damage, contribute to the pathogenesis of MGUS and MM. MICA expression is increased on plasma cells from MGUS patients compared with normal donors, whereas MM patients display intermediate MICA levels and a high expression of ERp5, a protein disulfide isomerase linked to MICA shedding (sMICA). MM, but not MGUS, patients harbor circulating sMICA, which triggers the down-regulation of NKG2D and impaired lymphocyte cytotoxicity. In contrast, MGUS, but not MM, patients generate high-titer anti-MICA antibodies that antagonize the suppressive effects of sMICA and stimulate dendritic cell cross-presentation of malignant plasma cells. Bortezomib, a proteasome inhibitor with anti-MM clinical efficacy, activates the DNA damage response to augment MICA expression in some MM cells, thereby enhancing their opsonization by anti-MICA antibodies. Together, these findings reveal that the alterations in the NKG2D pathway are associated with the progression from MGUS to MM and raise the possibility that anti-MICA monoclonal antibodies might prove therapeutic for these disorders.