Malaria in pregnancy can expose the fetus to malaria-infected erythrocytes or their soluble products, thereby stimulating T and B cell immune responses to malaria blood stage antigens. We hypothesized that fetal immune priming, or malaria exposure in the absence of priming (putative tolerance), affects the child's susceptibility to subsequent malaria infections. We conducted a prospective birth cohort study of 586 newborns residing in a malaria-holoendemic area of Kenya who were examined biannually to age 3 years for malaria infection, and whose malaria-specific cellular and humoral immune responses were assessed. Newborns were classified as (i) sensitized (and thus exposed), as demonstrated by IFNgamma, IL-2, IL-13, and/or IL-5 production by cord blood mononuclear cells (CBMCs) to malaria blood stage antigens, indicative of in utero priming (n = 246), (ii) exposed not sensitized (mother Plasmodium falciparum [Pf]+ and no CBMC production of IFNgamma, IL-2, IL-13, and/or IL-5, n = 120), or (iii) not exposed (mother Pf-, no CBMC reactivity, n = 220). Exposed not sensitized children had evidence for prenatal immune experience demonstrated by increased IL-10 production and partial reversal of malaria antigen-specific hyporesponsiveness with IL-2+IL-15, indicative of immune tolerance. Relative risk data showed that the putatively tolerant children had a 1.61 (95% confidence interval [CI] 1.10-2.43; p = 0.024) and 1.34 (95% CI 0.95-1.87; p = 0.097) greater risk for malaria infection based on light microscopy (LM) or PCR diagnosis, respectively, compared to the not-exposed group, and a 1.41 (95%CI 0.97-2.07, p = 0.074) and 1.39 (95%CI 0.99-2.07, p = 0.053) greater risk of infection based on LM or PCR diagnosis, respectively, compared to the sensitized group. Putatively tolerant children had an average of 0.5 g/dl lower hemoglobin levels (p = 0.01) compared to the other two groups. Exposed not sensitized children also had 2- to 3-fold lower frequency of malaria antigen-driven IFNgamma and/or IL-2 production (p<0.001) and higher IL-10 release (p<0.001) at 6-month follow-ups, when compared to sensitized and not-exposed children. Malaria blood stage-specific IgG antibody levels were similar among the three groups. These results show that a subset of children exposed to malaria in utero acquire a tolerant phenotype to blood-stage antigens that persists into childhood and is associated with an increased susceptibility to malaria infection and anemia. This finding could have important implications for malaria vaccination of children residing in endemic areas.