During early viral infection, activation of natural killer (NK) cells elicits the effector functions of target cell lysis and cytokine production. However, the cellular and molecular mechanisms leading to NK cell activation during viral infections are incompletely understood. In this study, using a model of acute viral infection, we investigated the mechanisms controlling cytotoxic activity and cytokine production in response to influenza (flu) virus. Analysis of cytokine receptor deficient mice demonstrated that type I interferons (IFNs), but not IL-12 or IL-18, were critical for the NK cell expression of both IFN-γ and granzyme B in response to flu infection. Further, adoptive transfer experiments revealed that NK cell activation was mediated by type I IFNs acting directly on NK cells. Analysis of signal transduction molecules showed that during flu infection, STAT1 activation in NK cells was completely dependent on direct type I IFN signaling, whereas STAT4 activation was only partially dependent. In addition, granzyme B induction in NK cells was mediated by signaling primarily through STAT1, but not STAT4, while IFN-γ production was mediated by signaling through STAT4, but not STAT1. Therefore, our findings demonstrate the importance of direct action of type I IFNs on NK cells to mount effective NK cell responses in the context of flu infection and delineate NK cell signaling pathways responsible for controlling cytotoxic activity and cytokine production.