We have investigated whether exposure to Gram-negative bacterial endotoxin in early neonatal life can alter neuroendocrine and immune regulation in adult animals. Exposure of neonatal rats to a low dose of endotoxin resulted in long-term changes in hypothalamic–pituitary–adrenal (HPA) axis activity, with elevated mean plasma corticosterone concentrations that resulted from increased corticosterone pulse frequency and pulse amplitude. In addition to this marked effect on the development of the HPA axis, neonatal endotoxin exposure had long-lasting effects on immune regulation, including increased sensitivity of lymphocytes to stress-induced suppression of proliferation and a remarkable protection from adjuvant-induced arthritis. These findings demonstrate a potent and long-term effect of neonatal exposure to inflammatory stimuli that can program major changes in the development of both neuroendocrine and immunological regulatory mechanisms.