Natural killer (NK) cells are innate immune cells that target and kill virally infected and malignant cells, making them an attractive target for adoptive immunotherapies. An alternative to donor-derived NK cells is the use of human pluripotent stem cell (hPSC)-derived NK cells, as a renewable "off the shelf" product. Previous studies have identified hPSC-derived NK cells as potently cytotoxic, compared to donor-derived NK cells. As the differentiation of hPSCs mimics early embryonic development, this raises the possibility that hPSC-derived NK cells are ontogenically distinct from adult NK cells. NK cells are present during embryonic hematopoiesis, but their ontogenic origins are poorly understood. NK cells are thought to arise from a common lymphoid progenitor (CLP), lying downstream of hematopoietic stem cells (HSCs), but evidence exists that NK cells may arise from HSC-independent progenitors as NK cells are found in the early murine fetal liver, and NK cell progenitors are found in the early human yolk sac (YS). In this study, we investigated the emergence of NK cells during murine and human embryonic hematopoietic development. During murine embryogenesis, overlapping HSC-independent waves of hematopoietic progenitors occur in the YS that give rise to hematopoietic cells prior to HSC emergence at E10.5. The "primitive" wave occurs at E7.5, followed by an "erythro-myeloid progenitor" (EMP) wave at E8.5. To study NK cell potential during murine YS hematopoiesis, we cultured total YS and sorted hematopoietic progenitors under NK cell promoting conditions. Strikingly, we found that the YS contains NK cell potential. Further, sorted E8.5 kit+CD41+CD16/32+ EMP progenitors, but not primitive hematopoietic progenitors, contain robust NK cell potential. EMP-derived NK (EMP-NK) cells were larger and more granular than adult CLP-derived NK cells. Additionally, NK cells from the E15.5 fetal liver were larger and more granular than NK cells from the adult spleen. Both EMP-NK cells and E15.5 fetal liver NK cells had a more robust degranulation response than their HSC-derived counterparts. Together, these data support the concept that EMP in the YS serve as an initial source of physiologically relevant, functional embryonic NK cells that are phenotypically and functionally distinct from adult NK cells. As hPSC-derived NK cells were described as potently cytotoxic, and we observed that murine HSC-independent NK cells robustly degranulate, we next asked whether NK cell development from hPSCs recapitulates that found in the murine embryo. We have demonstrated previously, using a stage-specific WNT signal manipulation approach that specifies ontogenically distinct hematopoietic progenitors, that hPSC-derived NK cell progenitors can be obtained from two distinct progenitors in vitro. In this study, we sought to better understand the development and function of these two NK cell populations. Stage-specific WNT inhibition (WNTi) during hPSC mesodermal patterning yielded extra-embryonic-like HOXA-/low CD34+ populations that possessed erythroid, myeloid and NK cell potential, but lacked T cell potential. The CD56+ NK cells in these cultures co-emerged with CD15+ granulocytes, indicating that these NK cells may arise from a committed myeloid progenitor. In contrast, HOXA+ CD34+ cells, obtained in a WNT-dependent (WNTd) manner, harbored erythro-myelo-lymphoid multi-lineage potential, including NK cell potential. Phenotypically, WNTi-NK cells were larger, more granular and more mature, compared to WNTd-NK and cord blood (CB)-derived NK cells, reminiscent of murine EMP-NK cells. Further, following multiple stimulation assays, WNTi-NK and WNTd-NK cells had different effector biases. WNTi-NK cells are biased for potent cytotoxic degranulation and exhibited superior cell killing in an ADCC assay. In contrast, WNTd-NK and CB-NK had an attenuated degranulation response, but robustly produced inflammatory cytokines. Finally, RNA-seq analysis demonstrated that WNTd-NK cells were most similar to CB-NK cells. Collectively, these studies identify for the first time that the murine EMP harbor NK cell potential, and these NK cells are functionally unique. These observations raise new questions regarding which ontogenic origin of NK cells should be used in future hPSC-derived adoptive immunotherapy strategies. Disclosures Fehniger: Cyto-Sen Therapeutics: Consultancy; Horizon Pharma PLC: Other: Consultancy (Spouse). Palis:Rubius Therapeutics: Consultancy.