Human CMV (HCMV) interferes with NK cell functions at various levels. The HCMV glycoprotein UL16 binds some of the ligands recognized by the NK-activating receptor NKG2D, namely UL16-binding proteins (ULBP) 1 and 2 and MHC class I-related chain B, possibly representing another mechanism of viral immune escape. This study addressed the expression and function of these proteins in infected cells. HCMV induced the expression of all three ULBPs, which were predominantly localized in the endoplasmic reticulum of infected fibroblasts together with UL16. However, while at a lower viral dose ULBP1 and 2 surface expression was completely inhibited compared to ULBP3, at a higher viral dose cell surface expression of ULBP1 and ULBP2 was delayed. The induction of ULBPs correlated with an increased dependency on NKG2D for recognition; however, the overall NK sensitivity did not change (suggesting that additional viral mechanisms interfere with NKG2D-independent pathways for recognition). Infection with a UL16 deletion mutant virus resulted in a different pattern compared to the wild type: all three ULBP molecules were induced with similar kinetics at the cell surface, accompanied by a pronounced, entirely NKG2D-dependent increase in NK sensitivity. Together our findings show that upon infection with HCMV, the host cell responds by expression of ULBPs and increased susceptibility to the NKG2D-mediated component of NK cell recognition, but UL16 limits these effects by interfering with the surface expression of ULBP1 and ULBP2.