The inability to isolate NK precursors at different stages of development has impeded understanding of the processes involved in NK maturation. The present studies utilize a flow cytometric technique that enables the isolation of operationally defined cell subsets, lytic (killers) and nonlytic conjugate-forming (binders), and nonconjugate-forming (free) cells, within NK-enriched preparations to test whether these might represent cells in different stages of NK development. To characterize both the steps involved in NK maturation and the cells responsible for IL-2 induced proliferation, these purified subsets were analyzed for their killer cell recruitment and renewal capacity. After a 2-h exposure to IFN-alpha or IL-2, induction of lytic function was developed only in the binder subset as detected in the single cell assay. Neither enhancement of killer cell recycling nor induction of binding function among the subsets was observed. However, after an 18-h culture period, with or without rIL-2, killer cells preferentially expressed activation Ag CD69 (Leu-23) and the IL-2R alpha-chain, TAC (CD25). In addition, all cells in contact with K562 targets displayed enhanced expression of these Ag. Killer cells also showed an enhanced capacity to proliferate in response to rIL-2 in a 6-day [3H]TdR incorporation assay. Additional irradiated K562 targets enhanced the proliferative capacity of all the subsets, with only a marginal effect on sorted free cells. Nevertheless, sorted free cells, in addition to binders, developed potent binding and lytic function when tested in the single-cell assay after 4 days of IL-2 culture. The lytic activity of killers was reduced, as compared with freshly isolated killers. The results are consistent with a two-step model for NK maturation, involving the acquisition of lytic function before proliferative capacity, and specific triggering of killer cells through interaction with target cells for induction of a proliferative competent state.