Abstract Systemic inflammation sensitizes the perinatal brain to an ischemic/excitotoxic insult but the mechanisms are poorly understood. We hypothesized that the mechanisms involve an imbalance between pro- and anti-inflammatory factors. A well characterized mouse model where a systemic injection of IL-1β during the first five postnatal days (inflammatory insult) is combined with an intracerebral injection of the glutamatergic analogue ibotenate (excitotoxic insult) at postnatal day 5 was used. Following the inflammatory insult alone, there was a transient induction of IL-1β and TNFα, compared with controls measured by quantitative PCR, ELISA, and Western blot. Following the combined inflammatory and excitotoxic insult, there was an induction of IL-1β, TNFα, and IL-6 but not of IL-10 and TNFR1, indicating an altered pro-/anti-inflammatory balance after IL-1β sensitized lesion. We then tested the hypothesis that the TNFα pathway plays a key role in the sensitization and insult using TNFα blockade (etanercept) and TNFα −/− mice. Etanercept given before the insult did not affect brain damage, but genetic deletion of TNFα or TNFα blockade by etanercept given after the combined inflammatory and excitotoxic insult reduced brain damage by 50%. We suggest this protective effect was centrally mediated, since systemic TNFα administration in the presence of an intact blood–brain barrier did not aggravate the damage and etanercept almost abolished cerebral TNFα production. In summary, sensitization was, at least partly, mediated by an imbalance between pro- and anti-inflammatory cytokines. Cerebral TNFα played a key role in mediating brain damage after the combined inflammatory and excitatory insult.