Natural killer (NK) cells are a population of cytotoxic innate lymphocytes that evolved prior to their adaptive counterparts and constitute one of the first lines of defense against infected or mutated cells. NK cells are rapidly activated, expressing an array of germ-line encoded receptors that allow them to scan for protein irregularities on cells and kill those deemed “altered-self.” NK cells rapidly produce a broad range of cytokines and chemokines following activation by virus, bacterial, or parasitic infection and are thus key in orchestrating inflammation. NK cells have previously been viewed to represent a relatively homogeneous group of IFN-γ-producing cells that express the surface markers NK1.1 and natural killer cell p46-related protein (NKp46 or NCR1 encoded by Ncr1) and depend on the transcription factor T-bet for their development. Recently, a second subset of T-bet-dependent innate cells, the group 1 innate lymphoid cells (ILC1), has been discovered which share many attributes of conventional NK (cNK) cells. Despite the similarities between ILC1 and cNK cells, they differ in several important aspects including their localization, transcriptional regulation, and phenotype suggesting each subset has distinct origins and functions in immune responses. Previously, the ability to detect and spontaneously kill cells that exhibit “altered-self” which is central to tumor and viral immunity has been thought to be an attribute restricted solely to cNK cells. The identification of ILC1 challenges this notion and suggests that key contributions from ILC1 may have gone unrecognized. Thus, understanding the different rules that govern the behavior of ILC1 and cNK cells in immune responses may potentially open unexpected doorways to uncover novel strategies to manipulate these cells in treating disease. Here, we review recent advances in our understanding of peripheral cNK cell and ILC1 heterogeneity in terms of their development, phenotype, homeostasis, and effector functions.