Preterm brain injury is highly associated with inflammation, which is likely related in part to sterile responses to hypoxia-ischemia. We have recently shown that neuroprotection with inflammatory pre-conditioning in the immature brain is associated with induction of toll-like receptor 7 (TLR7). We therefore tested the hypothesis that central administration of a synthetic TLR7 agonist, gardiquimod (GDQ), after severe hypoxia-ischemia in preterm-equivalent fetal sheep would improve white and gray matter recovery. Fetal sheep at 0.7 of gestation received sham asphyxia or asphyxia induced by umbilical cord occlusion for 25 minutes, followed by a continuous intracerebroventricular infusion of GDQ or vehicle from 1 to 4 hours (total dose 1.8 mg/kg). Sheep were killed 72 hours after asphyxia for histology. GDQ significantly improved survival of immature and mature oligodendrocytes (2′,3′-cyclic-nucleotide 3′-phosphodiesterase, CNPase) and total oligodendrocytes (oligodendrocyte transcription factor 2, Olig-2) within the periventricular and intragyral white matter. There were reduced numbers of cells showing cleaved caspase-3 positive apoptosis and astrogliosis (glial fibrillary acidic protein, GFAP) in both white matter regions. Neuronal survival was increased in the dentate gyrus, caudate and medial thalamic nucleus. Central infusion of GDQ was associated with a robust increase in fetal plasma concentrations of the anti-inflammatory cytokines, interferon-β (IFN-β) and interleukin-10 (IL-10), with no significant change in the concentration of the pro-inflammatory cytokine, tumor necrosis factor-α (TNF-α). In conclusion, delayed administration of the TLR7 agonist, GDQ, after severe hypoxia-ischemia in the developing brain markedly ameliorated white and gray matter damage, in association with upregulation of anti-inflammatory cytokines. These data strongly support the hypothesis that modulation of secondary inflammation may be a viable therapeutic target for injury of the preterm brain.