Binds and activates the KLRK1/NKG2D receptor, mediating natural killer cell cytotoxicity. Interacts with KLRK1/NKG2D (PubMed:11491531, PubMed:11777960, PubMed:11754823). Does not bind to beta2-microglobulin (By similarity). (Microbial infection) In CMV-infected cells, interacts with the viral glycoprotein UL16 and UL142; this interaction causes ULBP3 retention in the endoplasmic reticulum and cis-Golgi and prevents binding to and activation of KLRK1/NKG2D, providing CMV with an immune evasion mechanism. UL16-binding proteins (ULBPs) are unusual members of the extended MHC class I superfamily. They do not contain the alpha 3 domain and lack a transmembrane domain. Belongs to the MHC class I family.