IL-21 is a recently described cytokine, produced by activated Th cells, that shares significant homology with members of the IL-2 family of cytokines. IL-21 mediates its biological effects via the IL-21R in conjunction with the common receptor gamma-chain that is also shared by members of the IL-2 family. We report that culture of human primary NK and CD8(+) T cells with IL-21 in combination with IL-2 results in significant reduction of the cell surface expression of NKG2D, compared with that in cells treated with IL-2 alone. The reduced expression of NKG2D after IL-21 culture had functional consequences for NK cell function, as assessed by NKG2D-mediated redirected lysis assays and degranulation assays, compared with NK cells treated with IL-2 alone. IL-21-mediated NKG2D down-regulation in human NK cells correlated with a marked reduction of DNAX-activating protein of 10 kDa (DAP10) transcription in cells treated with IL-2 in combination with IL-21 compared with cells stimulated with only IL-2. This was attributed to a dramatic reduction in DAP10 promoter activity, as assessed by a DAP10 luciferase reporter construct. In contrast to NKG2D expression, IL-21 was able to induce the expression of the NK activation receptors NKp30 and 2B4 as well as the costimulatory receptor CD28 on CD8(+) T cells. These data indicate that IL-21 is able to channel NK and CD8(+) T cell function by altering the expression pattern of activation/costimulatory receptors.