The lack of natural killer (NK) cell–specific markers, as well as the overlap among several common surface antigens and functional properties, has obscured the delineation between NK cells and dendritic cells. Here, novel subsets of peripheral blood CD3/14/19^neg NK cells and monocyte/dendritic cell (DC)–like cells were identified on the basis of CD7 and CD4 expression. Coexpression of CD7 and CD56 differentiates NK cells from CD56⁺ monocyte/DC-like cells, which lack CD7. In contrast to CD7⁺CD56⁺ NK cells, CD7^negCD56⁺ cells lack expression of NK cell–associated markers, but share commonalities in their expression of various monocyte/DC-associated markers. Using CD7, we observed approximately 60% of CD4⁺CD56⁺ cells were CD7^neg cells, indicating the actual frequency of activated CD4⁺ NK cells is much lower in the blood than previously recognized. Functionally, only CD7⁺ NK cells secrete gamma interferon (IFNγ) and degranulate after interleukin-12 (IL-12) plus IL-18 or K562 target cell stimulation. Furthermore, using CD7 to separate CD56⁺ NK cells and CD56⁺ myeloid cells, we demonstrate that unlike resting CD7⁺CD56⁺ NK cells, the CD7^negCD56⁺ myeloid cells stimulate a potent allogeneic response. Our data indicate that CD7 and CD56 coexpression discriminates NK cells from CD7^negCD56⁺ monocyte/DC-like cells, thereby improving our ability to study the intricacies of NK-cell subset phenotypes and functions in vivo.