We have previously shown that human umbilical cord blood CD34 progenitor cells undergo in vitro differentiation into functional natural killer (NK) cells and that their coculture in the presence of HOXB4-transduced stromal MS-5 cells resulted in an increase in differentiated NK number. The present study was conducted to compare the stromal effect on NK lytic potential in the presence and absence of HOXB4. Our results provide evidence that HOXB4-transduced MS-5 cells as compared with transduced GFP (+) MS-5 cells induced highly differentiated cytotoxic NK cells. Importantly, this difference was not because of the expression of activating NK receptors but was associated with an increased induction of granzyme B degranulation in response to stimulation with NK cell susceptible targets. DNA microarray-based global transcriptional profiling confirmed the upregulation of granzyme B. These findings provide further evidence that HOXB4 is a crucial regulator of NK function and that its use in generating functional NK cells with increased lytic potential may be significant for cancer immunotherapy.