Virtually all human granular lymphocytes expressed the HNK-1 differentiation antigen when examined in lymphoid compartments from adults, neonates, and fetuses. The HNK-1+ cells were distinguishable into three subsets having distinct antigenic phenotypes: HNK+T3-M1-, HNK+T3+M1-, and HNK+T3-M1+. Thus, greater than 70% of the HNK-1+ cells from 13-17 wk fetuses (less than 0.2% of nucleated cells) lacked T cell antigens (e.g., T3, T8, T4, and T6) and the M1 myeloid antigen. Morphologically, the HNK+T3-M1- cells consisted of three different types: small granular lymphocytes (less than 10% of HNK-1+ cells), agranular small lymphocytes with a narrow rim of cytoplasm (70-80%), and agranular giant cells (greater than 15 micrometers) with considerable neutrophilic cytoplasm (15%). The purified fetal HNK-1+ cells exhibited a low level of cytotoxicity against K562 target cells. On the other hand, almost all of HNK-1+ cells in neonatal tissues as well as adult bone marrow, lymph node, and thymus, exhibited the HNK+T3+M1- phenotype, contained sparse cytoplasmic granules, and had an intermediate level of NK functional activity. Only adult blood and spleen contained a majority of mature HNK-1+ cells. These cells had an HNK+T3-M1- phenotype, abundant cytoplasmic granules, and maximum NK function. We propose that human NK cells may generate from a separate cell lineage and that they alter their phenotype, morphology, and functional capability during differentiation.