Tumor necrosis factor (TNF)-related apoptosis-inducing ligand (TRAIL) is a key effector molecule expressed by natural killer (NK) cells and has been shown to prevent tumor initiation, growth, and metastasis. Here we demonstrate that TRAIL is the dominant cytotoxic effector molecule expressed by NK cells in fetal mice. On birth and with age, NK cells develop full functional capacity, including the ability to secrete interferon gamma (IFN-gamma) and interleukin 13 (IL-13) and mediate perforin- and Fas ligand-mediated cytotoxicity. However, interestingly, a phenotypically immature TRAIL+ NK cell subpopulation is retained in the liver of adult mice, and its retention is dependent on IFN-gamma but not dependent on host IL-12, IL-18, or endogenous host pathogens. Adoptive transfer of either adult liver or neonatal TRAIL+ NK cells resulted in the appearance of TRAIL- NK cells with a mature phenotype, suggesting that these TRAIL+ NK cells were indeed a precursor. Although inducers of IFN-gamma stimulated TRAIL expression on mature NK cells, our data indicated that constitutive TRAIL expression was a hallmark of immature cytotoxic NK cells. This study is the first to describe the concomitant maturation of NK cell effector function with surface phenotype in vivo and implies an important defense role for NK cell TRAIL in the developing immune system.