To delineate factors involved in NK cell development, we established an in vitro system in which lineage marker (Lin)-, c-kit+, Sca2+ bone marrow cells differentiate into lytic NK1.1+ but Ly49- cells upon culture in IL-7, stem cell factor (SCF), and flt3 ligand (flt3L), followed by IL-15 alone. A comparison of the ability of IL-7, SCF, and flt3L to generate IL-15-responsive precursors suggested that NK progenitors express the receptor for flt3L. In support of this, when Lin-, c-kit+, flt3+ or Lin-, c-kit+, flt3- progenitors were utilized, 3-fold more NK cells arose from the flt3+ than from the flt3- progenitors. Furthermore, NK cells that arose from flt3- progenitors showed an immature NK1.1dim, CD2-, c-kit+ phenotype as compared with the more mature NK1.1bright, CD2+/-, c-kit- phenotype displayed by NK cells derived from flt3+ progenitors. Both progenitors, however, gave rise to NK cells that were Ly49 negative. To test the hypothesis that additional marrow-derived signals are necessary for Ly49 expression on developing NK cells, flt3+ progenitors were grown in IL-7, SCF, and flt3L followed by culture with IL-15 and a marrow-derived stromal cell line. Expression of Ly49 molecules, including those of which the MHC class I ligands were expressed on the stromal or progenitor cells, as well as others of which the known ligands were absent, was induced within 6-13 days. Thus, we have established an in vitro system in which Ly49 expression on developing NK cells can be analyzed and possibly experimentally manipulated.