Immunotherapy based on natural killer (NK) cell infusions is a potential adjuvant treatment for many cancers. Such therapeutic application in humans requires large numbers of functional NK cells that have been selected and expanded using clinical grade protocols. We established an extremely efficient cytokine-based culture system for ex vivo expansion of NK cells from hematopoietic stem and progenitor cells from umbilical cord blood (UCB). Systematic refinement of this two-step system using a novel clinical grade medium resulted in a therapeutically applicable cell culture protocol. CD56(+)CD3(-) NK cell products could be routinely generated from freshly selected CD34(+) UCB cells with a mean expansion of >15,000 fold and a nearly 100% purity. Moreover, our protocol has the capacity to produce more than 3-log NK cell expansion from frozen CD34(+) UCB cells. These ex vivo-generated cell products contain NK cell subsets differentially expressing NKG2A and killer immunoglobulin-like receptors. Furthermore, UCB-derived CD56(+) NK cells generated by our protocol uniformly express high levels of activating NKG2D and natural cytotoxicity receptors. Functional analysis showed that these ex vivo-generated NK cells efficiently target myeloid leukemia and melanoma tumor cell lines, and mediate cytolysis of primary leukemia cells at low NK-target ratios. Our culture system exemplifies a major breakthrough in producing pure NK cell products from limited numbers of CD34(+) cells for cancer immunotherapy.