I think the biggest difference is the NATO is a universal version made for worldwide guns. Also that the 5.56 is more powerful and can "blow" the barrel out over time if you shoot it too much out of one designed for just .223. The actual gun itself should say on it what caliber its supposed to have, thus my gun has both .223 and 5.56 on it, so I can use both types of ammo. Anybody else have more to add or to correct me on?