Fetal growth restriction (FGR) affects 5–10% of pregnancies, and can have serious consequences for both mother and child. Prevention and treatment are limited because FGR pathogenesis is poorly understood. Genetic studies implicate KIR and HLA genes in FGR, however, linkage disequilibrium, genetic influence from both parents, and challenges with investigating human pregnancies make the risk alleles and their functional effects difficult to map. Here, we demonstrate that the interaction between the maternal KIR2DL1, expressed on uterine natural killer (NK) cells, and the paternally inherited HLA-C*0501, expressed on fetal trophoblast cells, leads to FGR in a humanized mouse model. We show that the KIR2DL1 and C*0501 interaction leads to pathogenic uterine arterial remodeling and modulation of uterine NK cell function. This initial effect cascades to altered transcriptional expression and intercellular communication at the maternal-fetal interface. These findings provide mechanistic insight into specific FGR risk alleles, and provide avenues of prevention and treatment.