In this report, we describe the isolation of a unique subpopulation of CD7+ cells from human fetal blood. Umbilical cord blood was first immuno-rosette-depleted using T cell, B cell, granulocyte, and macrophage markers to isolate a Lin- population. The Lin- cells were further characterized by cell sorting. As expected, the CD34+Lin- population (30%) was homogeneous and highly enriched for hemopoietic progenitors. Somewhat surprisingly, the CD34-Lin- population was also shown to be relatively homogeneous, with over 95% of cells expressing CD7. This CD34-Lin-CD7+ population was shown to be negative for all other T cell markers tested (i.e., CD7+1-2-3-4-8-). However, approximately 30% of these cells were positive for the NK cell surface markers CD16 and CD56 (CD7+NK+). Both CD7+NK+ and CD7+NK- populations proliferated in response to stimulation in vitro with IL-2/PHA/PHA-conditioned medium. After such treatment, approximately 40% of the CD7+NK- acquired CD56 and 20% CD16, whereas about 20% of the CD7+NK+ population became CD2+. The significance of the 60% of CD7+NK- cells that did not acquire other markers remains to be determined. In addition, although neither population was cytotoxic when first isolated, both populations acquired the ability to lyse the NK target cell line K562 while cultured under these conditions. These data suggest that these two populations may represent a developmental sequence among NK cell precursors in human umbilical cord blood. Additional analysis of such precursors may be useful in understanding the ontogeny of NK cells in vivo.