Current immunostimulatory treatment protocols of cancer are often met with little success. Several lines of evidence indicate that the tumour microenvironment may impair the cytotoxic activity of natural killer (NK) cells. In this study, the NK cell-mediated killing of liver-derived cells was investigated at oxygen concentrations conform to those present in the human body at physiological and pathological conditions. The in vivo-relevant oxygen concentrations corresponding to 1, 2 and 6% were compared to those of the ambient air (21%) for their effect on the lysis of four liver-derived cell lines and the highly susceptible K562 cells. Exposure to each of the hypoxic conditions had a significantly inhibitory effect on NK cytotoxicity. Treatment with interferon-alpha (IFN-alpha) in hypoxia enhanced the cytotoxic potential of the NK cells less than it enhanced the cytotoxicity at ambient oxygen conditions. In summary, the oxygen tension profoundly affects both the cytoxic activity of NK cells and their activation by IFN-alpha.