During early brain development, microglial activation can negatively impact long-term neuroimmune and cognitive outcomes. It is well-known that significant alcohol exposure during early gestation results in a number of cognitive deficits associated with fetal alcohol spectrum disorders (FASD). Additionally, microglia are activated following high levels of alcohol exposure in rodent models of FASD. We sought to examine whether moderate prenatal alcohol exposure (70 mg/dL blood alcohol concentration) activates microglia in the fetal rat brain, and whether moderate fetal alcohol exposure has long-term negative consequences for immune function and cognitive function in the rat. We also measured inflammation within the placenta and maternal serum following moderate alcohol exposure to determine whether either could be a source of cytokine production in the fetus. One week of moderate prenatal alcohol exposure produced a sex-specific increase in cytokines and chemokines within the fetal brain. Cytokines were also increased within the placenta, regardless of the sex of the fetus, and independent of the low levels of circulating cytokines within the maternal serum. Adult offspring exposed to alcohol prenatally had exaggerated cytokine production in the brain and periphery in response to lipopolysaccharide (25 μg/kg), as well as significant memory deficits precipitated by this low-level of inflammation. Thus the immune system, including microglia, may be a key link to understanding the etiology of fetal alcohol spectrum disorders and other unexplored cognitive or health risks associated with even low levels of fetal alcohol exposure.