Apart from their role as antigen presenting cells, human peripheral blood monocyte and CD34+ cell‐derived dendritic cells (DC), have been demonstrated to exert cytotoxicity against some tumor cells, and their tumoricidal activity can be enhanced by some stimili. However, there have been no reports concerning the tumoricidal activity of human cord blood dendritic cells (CBDC). In this article, we report that human cord blood monocyte‐derived DC acquire the ability to kill hematological tumor cells, after activation with lipopolysaccharide (LPS) or γ‐interferon (IFN‐γ), associated with the enhanced TNF‐α‐related apoptosis‐inducing ligand (TRAIL) expression in CBDC cytoplasm. The CD14‐positive cells collected from cord blood were induced to CBDC in vitro. After activation with IFN‐γ for 12 h, CBDC exhibited cytotoxicity against HL60 and Jurkat cells, while activation with LPS induced cytotoxicity against Daudi and Jurkat cells. However, both LPS‐ and IFN‐γ‐stimulated CBDC showed no cytotoxic activity against normal CD14‐negative cord blood mononuclear cells. The formation of umbilical cord hematopoietic progenitor colonies, identified as burst‐forming unit‐erythroid and colony‐forming unit granulocyte‐macrophage, was not inhibited by stimulated or unstimulated CBDC. IFN‐γ or LPS stimulation enhanced intracellular but not cellular surface TRAIL, and neither intracellular nor cellular surface tumor necrosing factor‐α and Fas Ligand as analyzed by flow cytometry. Our results show that activated CBDC can serve as cytotoxic cells against hematological tumor cells without damaging the normal hematopoietic progenitor cells. (Cancer Sci 2005; 96: 127–133)