Natural killer (NK) cells belong to type 1 innate lymphoid cells (ILC1) and are essential in killing infected or transformed cells. NK cells mediate their effector functions using non-clonotypic germ-line-encoded activation receptors. The utilization of non-polymorphic and conserved activating receptors promoted the conceptual dogma that NK cells are homogeneous with limited but focused immune functions. However, emerging studies reveal that NK cells are highly heterogeneous with divergent immune functions. A distinct combination of several activation and inhibitory receptors form a diverse array of NK cell subsets in both humans and mice. Importantly, one of the central factors that determine NK cell heterogeneity and their divergent functions is their tissue residency. Decades of studies provided strong support that NK cells develop in the bone marrow. However, evolving evidence supports the notion that NK cells also develop and differentiate in tissues. Here, we summarize the molecular basis, phenotypic signatures, and functions of tissue-resident NK cells and compare them with conventional NK cells.