Recent advances in the development of reduced-intensity conditioning (RIC) have allowed a broader range of patients to access allogeneic hematopoietic stem cell transplantation (HSCT). Reconstitution of an effective immune system post-transplant, including natural killer (NK) cells, is critical for both tumor control and infectious disease control or prevention. The development and functions of NK cells in such settings remain elusive. Here we analyzed NK cell development in HLA-matched HSCT from related or unrelated donors, after RIC that included antithymocyte globulin (N = 45 patients). Our data reveal that NK cells quickly recover after RIC-HSCT, irrespective of donor type. Rapidly re-emerging NK cells, however, remain immature for more than 6 months. Effector functions resemble that of immature NK cells because they poorly produce IFN-γ and TNF-α in response to target cell stimulation, despite a rapid acquisition of degranulation ability and MIP-1β production. Strikingly, rapid reconstitution of cytokine production correlates with a lower relapse incidence (P = .01) and a better survival rate (P < .0001) at 1 year post-transplant, whereas degranulation capacity was associated with less relapse (P = .05). Our study demonstrates rapid quantitative reconstitution of the NK cell compartment despite administration of potent immune suppressive drugs as part of the conditioning regimen and after transplantation. However, there is a prolonged persistence of functional defects, the correction of which positively correlates with clinical outcome.