Neonatal CD71+ erythroid cells are thought to have immunosuppressive functions. Recently, we demonstrated that CD71+ erythroid cells from neonates born to women who underwent spontaneous preterm labor are reduced to levels similar to those of term neonates; yet, their functional properties are unknown. Herein, we investigated the functionality of CD71+ erythroid cells from neonates born to women who underwent spontaneous preterm or term labor. CD71+ erythroid cells from neonates born to women who underwent spontaneous preterm labor displayed a similar mRNA profile to that of those from term neonates. The direct contact between preterm or term neonatal CD71+ erythroid cells and maternal mononuclear immune cells, but not soluble products from these cells, induced the release of pro-inflammatory cytokines and a reduction in the release of TGFβ. Moreover, PTL-derived neonatal CD71+ erythroid cells: 1) modestly altered CD8+ T cell activation; 2) inhibited conventional CD4+ and CD8+ T-cell expansion; 3) suppressed the expansion of CD8+ regulatory T cells,; 4) regulated cytokine responses mounted by myeloid cells in the presence of a microbial product; and 5) indirectly modulated T-cell cytokine responses. In conclusion, neonatal CD71+ erythroid cells regulate neonatal T-cell and myeloid responses and their direct contact with maternal mononuclear cells induces a pro-inflammatory response. These findings provide insight into the biology of neonatal CD71+ erythroid cells during the physiologic and pathologic processes of labor.