Human newborns are susceptible to microbial infection and mount poor vaccine responses, yet the mechanisms underlying their susceptibility are incompletely defined. We have previously reported that despite normal basal expression of TLRs and associated signaling intermediates, human neonatal cord blood monocytes demonstrate severe impairment in TNF-alpha production in response to triacylated (TLR 2/1) and diacylated (TLR 2/6) bacterial lipopeptides (BLPs). We now demonstrate that in marked contrast, BLP-induced synthesis of IL-6, a cytokine with anti-inflammatory and Th2-polarizing properties, is actually greater in neonates than adults. Remarkably, newborn blood plasma confers substantially reduced BLP-induced monocyte synthesis of TNF-alpha, while preserving IL-6 synthesis, reflecting the presence in neonatal blood plasma of a soluble, low molecular mass inhibitory factor (<10 kDa) that we identify as adenosine, an endogenous purine metabolite with immunomodulatory properties. The neonatal adenosine system also inhibits TNF-alpha production in response to whole microbial particles known to express TLR2 agonist activity, including Listeria monocytogenes, Escherichia coli (that express BLPs), and zymosan particles. Selective inhibition of neonatal TNF-alpha production is due to the distinct neonatal adenosine system, including relatively high adenosine concentrations in neonatal blood plasma and heightened sensitivity of neonatal mononuclear cells to adenosine A3 receptor-mediated accumulation of cAMP, a second messenger that inhibits TLR-mediated TNF-alpha synthesis but preserves IL-6 production. We conclude that the distinct adenosine system of newborns polarizes TLR-mediated cytokine production during the perinatal period and may thereby modulate their innate and adaptive immune responses.