Myeloid-derived suppressor cells (MDSCs) are pathologically activated and relatively immature myeloid cells that have been implicated in the immunological regulation of many pathologic conditions^,. Phenotypically and morphologically, MDSCs are similar to neutrophils (PMN-MDSCs) and monocytes (M-MDSCs). However, they have potent suppressive activity and distinct gene expression profiles and biochemical characteristics. No or very few MDSCs are observed in steady-state physiological conditions. Therefore, until recently, accumulation of MDSCs was considered a consequence of pathological processes or pregnancy. Here, we report that MDSCs with a potent ability to suppress T cells are present during the first weeks of life in mice and humans. MDSC suppressive activity was triggered by lactoferrin and mediated by nitric oxide, PGE2, and S100A9 and S100A8 proteins. MDSCs from newborns had a transcriptome similar to that of tumor MDSCs, but with strong upregulation of an antimicrobial gene network, and had potent antibacterial activity. MDSCs played a critical role in control of experimental necrotizing enterocolitis (NEC) in newborn mice. MDSCs in infants with very low weight, who are prone to NEC, had lower MDSC levels and suppressive activity than did infants with normal weight. Thus, the transitory presence of MDSCs may be critical for regulation of inflammation in newborns.