Dendritic cells are critical for the induction of both primary immune responses and immunological tolerance, as well as for the regulation of T-helper 1 (Th1) and 2 (Th2) immune responses. As neonates are notably deficient in Th1 response and cord blood transplantation is noted to result in less graft-versus-host disease (GvHD), we compared the phenotypic and functional characteristics of monocyte-derived dendritic cells (DCs) that favour Th1 development from cord blood and adult peripheral blood to understand the underlying mechanisms of these observations. Our results showed that: (1) after culture for 7 d with interleukin (IL)-4 and granulocyte--macrophage colony-stimulating factor (GM-CSF), cord blood monocytes generated less CD1a(+) cells than adult peripheral blood monocytes, and the CD1a+ cell percentage decreased thereafter; (2) compared with adult blood DCs, cord blood DCs had reduced intensity of expression of CD1a and MHC class II molecules, but the expression levels of CD11c and CD86 were similar; (3) the endocytotic ability of cord blood DCs was reduced compared with adult blood DCs, and this function was related to reduced mannose receptor (MR)-positive cells; (4) furthermore, the ability of cord blood DCs to stimulate CD3(+) T cells in an allogeneic mixed lymphocyte reaction was significantly lower than that of adult blood DCs. These results suggested that the dysfunction of cord blood monocytes in differentiating into professional DCs will affect the activation of naive T cells, especially Th1 development, and may be related to the susceptibility to different infections in the neonates, as well as the lower incidence of GvHD in cord blood transplantation.