We present the metallicity distribution function (MDF) for 24,270 G and 16,847 K dwarfs at distances from 0.2 to 2.3 kpc from the Galactic plane, based on spectroscopy from the Sloan Extension for Galactic Understanding and Exploration (SEGUE) survey. This stellar sample is significantly larger in both number and volume than previous spectroscopic analyses, which were limited to the solar vicinity, making it ideal for comparison with local volume-limited samples and Galactic models. For the first time, we have corrected the MDF for the various observational biases introduced by the SEGUE target-selection strategy. SEGUE is particularly notable for its sample of K dwarfs, which are too faint to examine spectroscopically far from the solar neighborhood. The MDF of both spectral types becomes more metal-poor with increasing |Z|, which reflects the transition from a sample with small [α/Fe] values at small heights to one with enhanced [α/Fe] above 1 kpc. Comparison of our SEGUE distributions to those of two different Milky Way models reveals that both are more metal-rich than our observed distributions at all heights above the plane. Our unbiased observations of G and K dwarfs provide valuable constraints over the |Z|-height range of the Milky Way disk for chemical and dynamical Galaxy evolution models, previously only calibrated to the solar neighborhood, with particular utility for thin- and thick-disk formation models.