Objective: Human umbilical cord blood (UCB) is widely used for the isolation of mononuclear cells (MNCs) and development of hematopoietic stem cells for clinical use. This study aimed at establishing an in vitro system for the induction of natural killer (NK) cell differentiation from human UCB-derived MNCs (UCB-MNCs) and characterizing their phenotypic changes and tumor-killing activity in vitro. Methods: Previously cryopreserved UCB-MNCs were cultured with Flt3L and IL-15 for the induction of NK cell differentiation. Two other commercially available media were used to compare the potency in inducing NK cell differentiation and expansion. The additive effects of IL-21 on IL-15-initiated NK cell expansion and cytotoxic function were also examined by using direct cell counting and tumor-killing assay, respectively. Results: Flow cytometry showed successful differentiation of UCB-MNCs into NK cells. We could expand NK cells up to 21 days with the cell number being increased up to 40 folds. Addition of IL-21 could significantly enhance the tumor-killing activity of induced NK cells. Conclusions: The study provides a useful model for the establishment of NK cell expansion and differentiation from clinical specimens and for monitoring the phenotypic characteristics and cytotoxic function of induced NK cells. It is also a feasible platform for studying the mechanisms of NK differentiation processes or testing the efficacy of potential drugs for enhancing the differentiation or tumor-killing activity of NK cells.