Thymoglobulin is an antithymocyte globulin preparation used in hematopoietic stem cell transplantation (HSCT) to prevent rejection and graft-versus-host disease. Because natural killer (NK)-cell alloreactivity improves HSCT outcome, but only in patients receiving thymoglobulin, we investigated the in vitro effects of thymoglobulin on purified NK cells. Thymoglobulin binding to NK cells and NK-cell activation were assessed by flow cytometry. NK surface targets for thymoglobulin were determined by competition inhibition assays using monoclonal antibodies. Chromium 51 (Cr) release assay, Annexin V combined with 7-amino-actinomycin D staining, and carboxyfluorescein diacetate succinimidyl ester staining were used to study cytotoxic activity, apoptosis/cell death, and NK-cell proliferation, respectively. Interferon (IFN)-gamma production was determined by ELISA. Thymoglobulin, thymoglobulin derived-F(ab')2 fragments as well as rabbit IgG bound NK cells, and competed strongly with anti-CD16. Thymoglobulin enhanced the expression of activation (CD69 and NKG2D) and degranulation (CD107a) markers on NK cells. It competed with CD18 binding and decreased NK activity, but not interleukin-15-induced killer activity. Effects on apoptosis/cell death and proliferation were minimal. F(ab')2 fragments and rabbit IgG strongly induced IFN-gamma production by NK cells. Thymoglobulin binds to NK cells by CD16 by its variable and constant regions. The decrease in NK-cell cytotoxic activity is restored by interleukin-15, and contrasts sharply with the induction of activation, degranulation, and IFN-gamma production. These data support the hypothesis that thymoglobulin treatment is required to observe the improvement in HSCT outcome by NK-cell alloreactivity.