Human NK cells are divided into CD56brightCD16− cells and CD56dimCD16+ cells. We tested the hypothesis that CD56bright NK cells can differentiate into CD56dim cells by prospectively isolating and culturing each NK subset in vitro and in vivo. Our results show that CD56bright cells can differentiate into CD56dim 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 CD56dim cells had reduced IFN-γ production but increased perforin expression and cytolysis of cell line K562 targets. Flow cytometric fluorescent in situ hybridization demonstrated that CD56bright NK cells had longer telomere length compared with CD56dim NK cells, implying the former are less mature. Our data support a linear differentiation model of human NK development in which immature CD56bright NK cells can differentiate into CD56dim cells.