Lactoferrin is a non-heme iron binding glycoprotein produced during lactation and by epithelial cells at mucosal surfaces. The protein is a prominent component of the first line of mammalian host defense and its expression is upregulated in response to inflammatory stimuli. In this paper, the antibacterial and immune modulatory properties of lactoferrin that contribute to host defense are reviewed. In addition, the results of recent preclinical and clinical studies demonstrating that lactoferrin acts as an inhibitor of dermal inflammatory cytokine production are summarized. The results indicate that lactoferrin may act as a potent anti-inflammatory protein at local sites of inflammation including the respiratory and gastrointestinal tracts.