The human innate immune response to pathogens is not fully effective and mature until well into childhood, as exemplified by various responses to Toll-like receptor (TLR) agonists in newborns compared to adults. To better understand the mechanistic basis for this age-related difference in innate immunity, we compared tumor necrosis factor alpha (TNF-α) production by monocytes from cord blood (CB) and adult blood (AB) in response to LAM (lipoarabinomannan from Mycobacterium tuberculosis, a TLR2 ligand) and LPS (lipopolysaccharide from Escherichia coli, a TLR4 ligand). LPS or LAM-induced TNF-α production was 5 to 18 times higher in AB than in CB monocytes, whereas interleukin-1α (IL-1α) stimulated similar levels of TNF-α in both groups, suggesting that decreased responses to LPS or LAM in CB are unlikely to be due to differences in the MyD88-dependent signaling pathway. This impaired signaling was attributable, in part, to lower functional TLR4 expression, especially on CD14(+) CD16(+) monocytes, which are the primary cell subset for LPS-induced TNF-α production. Importantly, the frequency of CD14(+) CD16(+) monocytes in CB was 2.5-fold lower than in AB (P < 0.01). CB from Kenyan newborns sensitized to parasite antigens in utero had more CD14(+) CD16(+) monocytes (P = 0.02) and produced higher levels of TNF-α in response to LPS (P = 0.004) than CB from unsensitized Kenyan or North American newborns. Thus, a reduced CD14(+) CD16(+) activated/differentiated monocyte subset and a correspondingly lower level of functional TLR4 on monocytes contributes to the relatively low TNF-α response to LPS observed in immunologically naive newborns compared to the response in adults.