Granulated metrial gland (GMG) cells, a population of morphologically distinct, bone marrow-derived cells in murine decidua that react with mAb 4H12, are shown in this report to express NK-specific Ag and to become cytolytic to the NK cell target YAC-1 when cultured in the lymphokine IL-2. When 1-mm3 explants of 8-day decidual tissue were cultured with IL-2, large numbers of 4H12+ GMG cells migrated out of the tissue. Migration was dependent on the amount of IL-2 used. This explant technique was used to isolate a pure population of GMG cells. The migratory activated GMG cells were phenotypically 4H12+, NK1.1+, LGL-1+/-, CD3-, and MAC-1-. Furthermore, the IL-2-activated GMG cells killed YAC-1 but not P815 cells in a 4-h 51Cr-release cytotoxicity assay. 4H12+ GMG cells from collagenase-digested decidual tissue also were analyzed for the presence of NK lineage Ag by flow cytometry and shown to coexpress the NK-associated Ag NK1.1 and ASGM1 but not the T cell Ag CD3 or macrophage Ag MAC-1 or F4/80. GMG cells isolated by collagenase digestion did not express LGL-1, an Ag associated with lytic NK cells. Our results demonstrate that GMG cells express Ag and functions characteristic of NK cells, and thus GMG cells can be assigned to the NK lineage. The possible relevance of NK cells at implantation sites is discussed.