Human natural killer (NK) cells are defined as being membrane CD3-, CD16+, and/or CD56+ lymphocytes; however, little is known about the ontogenic development and maturational pathways of human NK cells. The functional, phenotypic, and maturational characteristics of human umbilical cord blood (CB) NK cell subsets were studied to gain insight into the ontogenic and maturational pathways of human NK cells. We have previously shown that there is a novel subset of CD16+ CD56- NK cells present in CB. Here we further demonstrate differences in the expression of the NK-associated molecules CD2, CD7, CD8, and CD25 between CB and peripheral blood (PB) NK cells and between CB NK cell subsets. Although CB NK cell subsets were deficient in or had less lytic activity against K562 cells compared to PB NK cells, CB NK cells did possess the lytic molecules perforin and granzyme B and when artificially stimulated to secrete their granules during lytic assays, were capable of lytic activity equivalent to that of PB NK cells. Regardless of differences in phenotype and function of CB NK cell subsets, short-term and long-term incubation with cytokines induced functional (adult-like NK activity) and phenotypic (adult-like CD16+56+ or CD16-56+ surface antigen phenotype) maturation, respectively. Interleukin-2 (IL-2), IL-12, and IL-15, but not IL-7, interferon-gamma (IFN-gamma) nor tumor necrosis factor-alpha (TNF-alpha) induced functional and phenotypic maturation of CB NK cell subsets. Interestingly, culture of CB NK cell subsets with IL-2 or IL-15 led to acquisition of predominantly a CD16+56+ phenotype, while culture with IL-12 led to acquisition of both CD16+56+ and CD16-56+ phenotypes. Both functional and phenotypic maturation were not dependent upon proliferation. Studies using neutralizing anti-IFN-gamma and anti-TNF-alpha antibodies showed that survival and phenotypic maturation upon cytokine stimulation is influenced by endogenous production of TNF-alpha but not IFN-gamma. These results demonstrate that CB NK cell subsets are functionally and phenotypically immature but are capable of maturation. Additionally, CD16+56- NK cells are implicated as possible precursors of mature CD16+56+ and CD16-56+ NK cells.