NKG2D is a potent activating receptor on natural killer (NK) cells and acts as a molecular sensor for stressed cells expressing NKG2D ligands such as infected or tumor-transformed cells. Although NKG2D is expressed on NK cell precursors, its role in NK cell development is not known. We have generated NKG2D-deficient mice by targeting the Klrk1 locus. Here we provide evidence for an important regulatory role of NKG2D in the development of NK cells. The absence of NKG2D caused faster division of NK cells, perturbation in size of some NK cell subpopulations, and their augmented sensitivity to apoptosis. As expected, Klrk1(-/-) NK cells are less responsive to tumor targets expressing NKG2D ligands. Klrk1(-/-) mice, however, showed an enhanced NK cell-mediated resistance to mouse cytomegalovirus infection as a consequence of NK cell dysregulation. Altogether, these findings provide evidence for regulatory function of NKG2D in NK cell physiology.