Natural killer (NK) cells have been defined as CD3 epsilon-, CD16+ and/or CD56+ lymphocytes that mediate major histocompatibility complex (MHC)-unrestricted cytotoxicity against certain tumors and virus-infected cells. Unlike T lymphocytes, NK cells do not rearrange or productively express T cell antigen receptor genes. Moreover, NK cells from adults have been reported to not express CD3 gamma, delta, or epsilon proteins on the cell surface or in the cytoplasm. Nonetheless, NK cells have been shown to share a number of antigenic and functional similarities to T cells that suggest the possibility of common origins. In this report, we demonstrate that functional NK cells exist in liver at early stages of human embryonic development. Freshly isolated fetal NK cells mediated MHC-unrestricted cytotoxicity against NK-sensitive targets and acquired the ability to lyse NK-resistant tumors after overnight culture in interleukin 2. Unlike adult NK cells, freshly isolated fetal liver NK cells and clones derived from these cells, as well as a subset of cord blood NK cells, express substantial levels of CD3 delta and CD3 epsilon proteins in the cytoplasm. Expression of CD3 epsilon and CD3 delta transcripts and cytoplasmic proteins in fetal NK clones was confirmed by polymerase chain reaction and Western blot analysis. These findings support the concept that NK and T cells may arise from a common progenitor that expresses components of the CD3 complex. Alternatively, it is possible that the cytoplasmic CD3 delta, epsilon+ fetal NK cells represent a distinct subpopulation of NK cells that is predominant in the fetus, but replaced by the cytoplasmic CD3 delta,epsilon- adult NK cell population after embryogenesis.