IL-21 plays a role in the proliferation and maturation of NK cells developed from hematopoietic stem cells. In this study, we found that IL-21, in the presence of physiological concentration of hydrocortisone (HC), has a significant impact on the functions of NK cells derived from umbilical cord blood (CB) populations. We demonstrate that IL-21, in combination with Flt3-ligand, IL-15 and HC, induces high proliferative responses and, apart from enhancing NK-mediated cytotoxicity, it also induces a significant increase in lymphokine-activated killer activity of CB/CD34+-derived CD56+ cells. In addition, IL-21 induced changes in the CD56+ cell cytokine secretion profile. Thus, we observed increased levels of IL-10 and granulocyte macrophage colony-stimulating factor, whereas tumor necrosis factor-alpha levels decreased. IFN-gamma production was also modified by IL-21, depending on the presence or absence of IL-18. CB/CD34+ cells did not express the IL-21R ex vivo, but receptor expression was induced during their commitment to differentiation into CD56+ cells. Our data ascribe to IL-21 an essential role on NK cell development and function under conditions similar to the in vivo CB microenvironment.