Background: Altered regulatory immune responses to microbial stimuli and intestinal colonization of beneficial bacteria early in life may contribute to the development of allergic diseases (e.g., atopic dermatitis [AD]). However, few reports have investigated these factors simultaneously. The purpose of this study was to analyze neonatal immune responses to microbial stimuli as well as intestinal colonization of beneficial bacteria, in relation to the development of AD in a birth cohort. Methods: Pregnant women were recruited, and their infants were followed up until 7 months of age. Levels of interleukin (IL)-10 released from cord-blood mononuclear cells (CBMCs) stimulated with heat-killed gram-positive bacteria (Bifidobacterium bifidum and Lactobacillus rhamnosus GG) and Lactobacillus-derived peptidoglycan were measured. Fecal Bifidobacterium counts at 4 days and 1 month were quantified using real-time polymerase chain reaction. The development of AD was determined by means of a questionnaire at 7 months of age. Results: The levels of released IL-10 were significantly lower in infants with AD (n = 17) than in infants without AD (n = 53) for all stimuli. In infants with fecal Bifidobacterium, the incidence of AD was inversely associated with the release of IL-10 from cord blood mononuclear cells. Conclusion: Our findings suggest that impaired IL-10 production in response to microbial stimuli at birth may be associated with an increased risk of developing infantile AD, even in infants with early colonization of intestinal bifidobacteria.