Human NK cells are divided into CD56(bright)CD16(-) cells and CD56(dim)CD16(+) cells. We tested the hypothesis that CD56(bright) NK cells can differentiate into CD56(dim) cells by prospectively isolating and culturing each NK subset in vitro and in vivo. Our results show that CD56(bright) cells can differentiate into CD56(dim) both in vitro, in the presence of synovial fibroblasts, and in vivo, upon transfer into NOD-SCID mice. In vitro, this differentiation was inhibited by fibroblast growth factor receptor-1 Ab, demonstrating a role of the CD56 and fibroblast growth factor receptor-1 interaction in this process. Differentiated CD56(dim) cells had reduced IFN-gamma production but increased perforin expression and cytolysis of cell line K562 targets. Flow cytometric fluorescent in situ hybridization demonstrated that CD56(bright) NK cells had longer telomere length compared with CD56(dim) NK cells, implying the former are less mature. Our data support a linear differentiation model of human NK development in which immature CD56(bright) NK cells can differentiate into CD56(dim) cells.