Interferon-producing killer dendritic cells (IKDCs) have only recently been described and they share some properties with plasmacytoid dendritic cells (pDCs). We now show that they can arise from some of the same progenitors. However, IKDCs expressed little or no RAG-1, Spi-B, or TLR9, but responded to the TLR9 agonist CpG ODN by production of IFNgamma. The RAG-1(-)pDC2 subset was more similar to IKDCs than RAG-1(+) pDC1s with respect to IFNgamma production. The Id-2 transcriptional inhibitor was essential for production of IKDCs and natural killer (NK) cells, but not pDCs. IKDCs developed from lymphoid progenitors in culture but, unlike pDCs, were not affected by Notch receptor ligation. While IKDCs could be made from estrogen-sensitive progenitors, they may have a slow turnover because their numbers did not rapidly decline in hormone-treated mice. Four categories of progenitors were compared for IKDC-producing ability in transplantation assays. Of these, Lin(-)Sca-1(+)c-Kit(Hi)Thy1.1(-)L-selectin(+) lymphoid progenitors (LSPs) were the best source. While NK cells resemble IKDCs in several respects, they develop from different progenitors. These observations suggest that IKDCs may arise from a unique differentiation pathway, and one that diverges early from those responsible for NK cells, pDCs, and T and B cells.