Over the last decade, progress in molecular and cellular biology and gene targeting techniques has removed veils from the mysteries of natural killer (NK) cell development and function. NK cells are derived from hematopoietic stem cells, for which stem cell factor or Flt3 ligand is required in the early stage of differentiation to NK cell progenitors. Interleukin 15 then plays a crucial role for differentiation and/or maturation of NK progenitors into functional NK cells. Several members of the zinc finger, ETS, and interferon regulatory factor transcription factor families are also involved in the lineage commitment of hematopoietic stem or progenitors into NK cells. Animal models as well as patients deficient in NK cells have provided formal evidence that NK cells play an important role in vivo for innate immunity against tumors and viral infections and for linkage to adaptive immunity. Moreover, recent studies have revealed novel human NK cell subsets in peripheral blood that have the phenotypical characteristics CD3- CD16+ CD56+ and CD3- CD16- CD56bright, which are mainly involved in cytotoxicity and cytokine-mediated immunoregulation, respectively.