Natural killer (NK) cells are innate cytotoxic lymphocytes with important roles in immunity and pregnancy. The NK cell inhibitory receptor KIR2DL3 binds HLA-C1 (HLA-C alleles bearing Asn80) while KIR2DL1 binds HLA-C2 (Lys80). KIR2DL3 and HLA-C1 homozygous individuals are protected from chronic viral infection while mothers carrying KIR2DL1 with HLA-C2 positive foetuses are at a higher risk of pregnancy disorders. Investigations into HLA-C*05:01 were inspired by an as yet unpublished observation from the Boyton/Altmann lab that this allele is protective against disease progression in multiple sclerosis. Here, key differences between interactions by KIR2DL1 with C2 and KIR2DL3 with C1 are demonstrated. KIR2DL3 appears more peptide selective than KIR2DL1 for their respective ligands. Investigations into how HLA-C bound peptides modulate the interaction of KIR and HLA-C found that 2 of 20 HLA-C*05:01 (C2) peptides tested could confer binding to KIR2DL2 and KIR2DL3 when presented on HLA-C*05:01 showing that KIR specificity for position 80 could be overridden. HLA-C*05:01 differs from HLA-C*08:02 (C1) by two residues and is stabilised by identical HLA-C*05:01 peptides. Intriguingly, KIR2DL1 bound HLA-C*05:01 and KIR2DL3 bound HLA-C*08:02 in the presence of 16 of 20 and 8 of 20 of the same peptides tested respectively. Therefore, it appears that KIR2DL3 with HLA-C1 is more peptide selective than KIR2DL1 with HLA-C2. HLA-C also influences intrinsic NK cell function through NK cell licensing, however KIR2DL1 and KIR2DL3 had similar impact on licensing. Interestingly, KIR2DL1 bound HLA-C*05:01, but not other C2 independently of TAP. Experiments examining peptide competition offer an explanation for peptide antagonism of KIR inhibition. Finally, the peptide selectivity model for understanding disease associations of KIR and HLA-C is presented and discussed.