Talks faltered after more than seven hours of negotiating on Monday.
Commissioner David Stern canceled two weeks of the regular season, which comes out to 100 games.
The main sticking point is how to split basketball-related income. Right now the only thing they seem to agree on is that there's a wide gap in negotiation.
"We now know where we are and where the players are, we don't have to guess about it," said Stern. "We part on good terms with the negotiators. We just have a gulf that separates us ."
"We are going to do the responsible thing and try our best to bring them basketball as soon as we can," said NBA Players Association President Derek Fisher.
The owners and players remain in contact, but no formal talks are scheduled.
Stern says the canceled games will impact future negotiations and cost the league at least $83 million in ticket sales alone.
He also says that future games could be canceled, and that it is doubtful the full 82 games will be played even if an agreement is struck.
Season ticket holders will be refunded plus interest for all games that are lost.
This is the first time the league has lost games due to a labor dispute since 1998.