Low-dose hydrocortisone (LDHC) therapy modulates inflammatory responses in adults and improves outcomes in some septic adults and neonates, but its immunologic effects have not been evaluated in neonates. The objective of this study was to evaluate effects of LDHC therapy on ex vivo immune function in neonatal horses (foals). We hypothesized that LDHC treatment would dampen proinflammatory responses without impairing neutrophil function. Hydrocortisone (1.3 mg/kg/d i.v.) was administered to foals in a tapering 3.5 d course. Peripheral blood leukocytes were collected from foals before, during, and after hydrocortisone treatment. A separate group of age-matched untreated foals served as controls. Endotoxin-induced peripheral blood mononuclear cell gene expression of inflammatory cytokines was measured by real-time quantitative RT-PCR. Neutrophils were incubated with labeled, killed Staphylococcus aureus or Escherichia coli for assessment of phagocytosis, and with phorbol myristate acetate, zymosan, or endotoxin for measurement of reactive oxygen species (ROS) production. Neutrophil phagocytosis and ROS production were similar in both groups. Foals receiving hydrocortisone had significantly decreased endotoxin-induced expression of TNF-α, IL-6, IL-8, and IL-1β. These data suggest that this LDHC treatment regimen ameliorates endotoxin-induced proinflammatory cytokine expression in neonatal foals without impairing innate immune responses needed to combat bacterial infection.