Human neonates are highly susceptible to a wide range of infections, which has been attributed to deficiencies in their innate and adaptive immunity. In contrast to the well-documented immaturity in neonatal adaptive immunity, deficiencies in their innate immunity are less defined. This study examined the inflammatory response of neonatal monocytes to bacterial lipopolysaccharide (LPS) and peptidoglycan (PGN) stimulation and discriminated the underlying Toll-like receptor (TLR)-mediated signal transduction pathways. Cord blood from 30 healthy newborns of full-term elective cesarean sections and peripheral blood from 25 healthy adult volunteers were collected. Ex vivo production of inflammatory cytokines was assessed by cytometric bead array, and expression of CD14, TLR4, TLR2, phosphorylated NF-κB p65 and p38 on monocytes were detected by FACScan analysis. Neonatal whole blood showed significantly decreased ex vivo TNF-α and IL-1β production in response to stimulation with the TLR4 agonist LPS, but not the TLR2 agonist PGN, when compared with adult whole blood. Consistent with the diminished inflammatory cytokine response to LPS stimulation, neonatal monocytes exhibited substantially impaired TLR-mediated signal transduction pathways characterized by down-regulated expression of CD14 and TLR4, and suppressed phosphorylation of NF-κB p65 at Ser536 and p38 following LPS stimulation. In addition, neonates had a significantly lower percentage of TLR4(+)/CD14(+) monocytes than adults. These results indicate that in contrast to the adult, human neonates display deficiencies in innate immunity-associated inflammatory cytokine responses due to their defective TLR signaling pathways, which may render them more susceptible to microbial infection.