The human liver is enriched in NK cells which are potent effectors of the innate immune system. We have determined that liver NK cells freshly isolated from surgical specimens from patients with hepatic malignancy have less cytolytic activity than autologous blood NK cells. This difference was due to a higher proportion of CD16− NK cells in the liver and reduced cytotoxicity by CD16+ liver NK cells compared with their blood counterparts. CD16+ liver NK cells had similar expression of activating NK receptors and had similar intracellular granzyme B and perforin content compared with CD16+ blood NK cells. CD16+ liver NK cells contained a reduced fraction of cells with inhibitory killer Ig-like receptors specific for self-MHC class I (self-killer Ig-related receptor (KIR)) and an increased fraction of self-KIR neg NKG2A pos and self-KIR neg NKG2A neg cells. Using single-cell analysis of intracellular IFN-γ production and cytotoxicity assays, we determined that CD16+ liver NK cells expressing self-KIR were more responsive to target cells than those cells that did not express self-KIR molecules. CD16+ liver NK cells gained cytolytic function when stimulated with IL-2 or cultured with LPS or poly (I: C)-activated autologous liver Kupffer cells. Thus, the human liver contains NK cell subsets which have reduced effector function, but under appropriate inflammatory conditions become potent killers.