New members of the extended MHC class I‐like family were identified based on their ability to bind human cytomegalovirus glycoprotein UL16 and/or their mutual homology. Soluble UL16 binding prteins (ULBP) competed with each other for binding to NK cells. Treatment of human and mouse NK cells with ULBP led to increased production of cytokines/chemokines, proliferation, cytotoxic activity and up‐regulation of activation‐associated surface molecules. The presence of ULBP during the stimulation phase of the CTL assay caused increased cytotoxic activity. Addition of soluble recombinant UL16 protein inhibited the biological activities mediated by ULBP, suggesting the existence of a novel mechanism utilized by CMV to evade elimination by the host immune system.