Non‐classical MHC class I molecule HLA‐E is the ligand for CD94 / NKG2 NK cell receptors. Surface expression of HLA‐E requires binding of specific HLA class I leader sequences. The uterine mucosa in early pregnancy (decidua) is infiltrated by large numbers of NK cells, which are closely associated with placental trophoblast cells. In this study we demonstrate that trophoblast cells express HLA‐E on their cell surface in addition to the previously reported expression of HLA‐G and HLA‐C. Furthermore, we show that the vast majority of decidual NK cells bind to HLA‐E tetrameric complexes and this binding is inhibited by mAb to CD94. Thus, recognition of fetal HLA‐E by decidual NK cells may play a key role in regulation of placentation. The functional consequences of decidual NK cell interaction were investigated in cytotoxicity assays using polyclonal decidual NK cells. The overall effect of CD94 / NKG2 interaction with HLA‐E is inhibition of cytotoxicity by decidual NK cells. However, since decidual NK cells are unable to kill trophoblast even in the presence of mAb to MHC class I molecules and NK cell receptors, HLA‐E interaction with CD94 / NKG2 receptors may regulate other functions besides cytolysis during implantation.