Food allergy is a major health burden in early childhood. Infants who develop food allergy display a proinflammatory immune profile in cord blood, but how this is related to interleukin-4 (IL-4)/T helper 2 (TH2)-type immunity characteristic of allergy is unknown. In a general population-derived birth cohort, we found that in infants who developed food allergy, cord blood displayed a higher monocyte to CD4+ T cell ratio and a lower proportion of natural regulatory T cell (nTreg) in relation to duration of labor. CD14+ monocytes of food-allergic infants secreted higher amounts of inflammatory cytokines (IL-1β, IL-6, and tumor necrosis factor-α) in response to lipopolysaccharide. In the presence of the mucosal cytokine transforming growth factor-β, these inflammatory cytokines suppressed IL-2 expression by CD4+ T cells. In the absence of IL-2, inflammatory cytokines decreased the number of activated nTreg and diverted the differentiation of both nTreg and naïve CD4+ T cells toward an IL-4-expressing nonclassical TH2 phenotype. These findings provide a mechanistic explanation for susceptibility to food allergy in infants and suggest anti-inflammatory approaches to its prevention.