During pregnancy the uterine decidua is populated by large numbers of natural killer (NK) cells with a phenotype CD56^superbrightCD16⁻CD9⁺KIR⁺ distinct from both subsets of peripheral blood NK cells. Culture of highly purified CD16⁺CD9⁻ peripheral blood NK cells in medium containing TGFβ1 resulted in a transition to CD16⁻CD9⁺ NK cells resembling decidual NK cells. Decidual stromal cells, when isolated and cultured in vitro, were found to produce TGFβ1. Incubation of peripheral blood NK cells with conditioned medium from decidual stromal cells mirrored the effects of TGFβ1. Similar changes may occur upon NK cell entry into the decidua or other tissues expressing substantial TGFβ. In addition, Lin⁻CD34⁺CD45⁺ hematopoietic stem/progenitor cells could be isolated from decidual tissue. These progenitors also produced NK cells when cultured in conditioned medium from decidual stromal cells supplemented with IL-15 and stem cell factor.