Human lymphocytes with NK and K cell activities can be identified by the HNK-1 (Leu-7) monoclonal antibody. In these experiments, subsets of HNK-1+ cells from blood and bone marrow were distinguished by their expression of other cell surface antigens, their morphology, and their NK functional capability. Two-color immunofluorescence analysis revealed that subpopulations of HNK-1+ cells in blood expressed antigens found on mature T cells (e.g., T1, T3, T4, T8), but none expressed antigens characteristic of immature T cells (T6, T9). The majority of HNK-1+ cells (greater than 60%) also expressed a myeloid antigen (M1), whereas a minority (less than 25%) expressed HLA-DR. HNK-1+ cells were separated into T3- and T3+ subsets with the fluorescence-activated cell sorter and analyzed for their morphology and NK cell function. HNK+T3- cells exhibited a high level of NK activity against K562 target cells and contained many cytoplasmic granules. On the other hand, HNK+T3+ cells had low NK activity and a paucity of cytoplasmic granules. The cell sizes of HNK+T3- and HNK+T3+ cells were indistinguishable by light-scatter analysis. When these cell fractions were analyzed further, a reciprocal relationship between T3 and M1 antigen expression was observed. These results thus delineate two distinct subsets of human HNK-1+ cells in blood with different cytotoxic capability: HNK+T3-M1+ and HNK+T3+M1- cells. Analysis of bone marrow cells demonstrated that only 0.7% of the nucleated cells expressed the HNK-1 antigen; virtually all of these cells expressed both the T3 and T8 antigens but lacked the M1 antigen. Thus, a majority of HNK-1+ cell population in blood were T3-M1+, whereas almost all bone marrow HNK-1+ cells were T3+M1-. We propose that these subsets of cells represent different stages in NK cells differentiation.