NK cells are the lymphocytes that are differentiated from hematopoietic stem cells in bone marrow (BM) through sequential acquisition of functional receptors. They are one of the critical components of innate immune system. The process of NK differentiation involves a variety of factors such as cytokines, membrane factors, and transcription factors in addition to BM microenvironment. NK cells express their own activating and inhibitory receptors. The cytolytic functions of NK cells against target cells are determined by the balance between theses activating and inhibitory receptors. NK cells discriminate self from non-self by MHC class I-binding inhibitory receptor. Once NK cell inhibitory receptors bound to their MHC class I-ligand, the target cells are protected from NK cell-mediated cytotoxicity. The cytolytic effector functions as well as the characteristic surface phenotypes of NK cells are acquired during the differentiation process. NK cells are emerging to apply as therapeutic agents against a variety of cancers by manipulating differentiation processes and intrinsic activities of the NK cell.