Allogeneic hematopoietic cell transplantation can be curative for patients with high-risk acute leukaemia. Umbilical cord blood (UCB) is an increasingly used source of allogeneic stem cells for patients who are in need of a transplant, but do not have a sibling donor. This review highlights the similarities and differences between the natural killer (NK) cells obtained from adult peripheral blood (PB) and UCB. These two cell sources show similar percentages of NK cells, including the major CD56dim and CD56bright subpopulations. UCB also contains an additional CD56−CD16+ subset, not typically found in PB. In addition, there are a number of progenitor cell populations in UCB that can give rise to NK cells. Some studies showed that UCB NK cells express a relatively higher percentage of inhibitory receptors (CD94/NKG2A and killer-cell immunoglobulin-like receptors) and less adhesion molecules. Resting UCB NK cells also show significantly less cytotoxicity compared to PB NK cells. However, following cytokine stimulation, the cytotoxicity of UCB NK cells can be rapidly increased to levels that are comparable to PB NK cells. Activation and expansion protocols for UCB NK cells are briefly reviewed. Lastly, we outline the early use of UCB NK cells in clinical trials.