Adoptive transfer of antitumor lymphocytes has gained intense interest in the field of cancer therapeutics over the past two decades. Human natural killer (NK) cells are a promising source of lymphocytes for anticancer immunotherapy. NK cells are part of the innate immune system and exhibit potent antitumor activity without need for human leukocyte antigen matching and without prior antigen exposure. Moreover, the derivation of NK cells from pluripotent stem cells could provide an unlimited source of lymphocytes for off-the-shelf therapy. To date, most studies on hematopoietic cell development from human embryonic stem cells (hESCs) and induced pluripotent stem cells (iPSCs) have used incompletely defined conditions and been on a limited scale. Here, we have used a two-stage culture system to efficiently produce NK cells from hESCs and iPSCs in the absence of cell sorting and without need for xenogeneic stromal cells. This novel combination of embryoid body formation using defined conditions and membrane-bound interleukin 21-expressing artificial antigen-presenting cells allows production of mature and functional NK cells from several different hESC and iPSC lines. Although different hESC and iPSC lines had varying efficiencies in hematopoietic development, all cell lines tested could produce functional NK cells. These methods can be used to generate enough cytotoxic NK cells to treat a single patient from fewer than 250,000 input hESCs/iPSCs. Additionally, this strategy provides a genetically amenable platform to study normal NK cell development and education in vitro.