Infections are a leading cause of mortality and morbidity in newborns. The high susceptibility of newborns to infection has been associated with a limited capacity to mount protective immune responses. Monocytes and macrophages are involved in the initiation, amplification, and termination of immune responses. Depending on cues received from their environment, monocytes differentiate into M1 or M2 macrophages with proinflammatory or anti-inflammatory and tissue repair properties, respectively. The purpose of this study was to characterize differences in monocyte to macrophage differentiation and polarization between newborns and adults. Monocytes from umbilical cord blood of healthy term newborns and from peripheral blood of adult healthy subjects were exposed to GM-CSF or M-CSF to induce M1 or M2 macrophages. Newborn monocytes differentiated into M1 and M2 macrophages with similar morphology and expression of differentiation/polarization markers as adult monocytes, with the exception of CD163 that was expressed at sevenfold higher levels in newborn compared to adult M1 macrophages. Upon TLR4 stimulation, newborn M1 macrophages produced threefold to sixfold lower levels of TNF than adult macrophages, while production of IL-1-β, IL-6, IL-8, IL-10, and IL-23 was at similar levels as in adults. Nuclear levels of IRF5, a transcription factor involved in M1 polarization, were markedly reduced in newborns, whereas the NF-κB and MAP kinase pathways were not altered. In line with a functional role for IRF5, adenoviral-mediated IRF5 overexpression in newborn M1 macrophages restored lipopolysaccharide-induced TNF production. Altogether, these data highlight a distinct immune response of newborn macrophages and identify IRF5 as a key regulator of macrophage TNF response in newborns.