The early postnatal period is a critical time for gastrointestinal (GI) and immune development. Neonates fed mother's milk have more rapid GI and immune development than fed-formula infants. In addition, clinical and epidemiologic data provide strong evidence that breastfeeding reduces the incidence and/or severity of infectious diseases. Lactoferrin is a 77 kDa, iron-binding glycoprotein that is present at high concentration in human milk compared with bovine milk and infant formula. It is a multifunctional protein that mediates many of the physiological processes in which breastfed infants have advantages over their formula-fed peers, including promoting GI and immune development, protection from infections, and improved cognitive development. Feeding bovine lactoferrin or recombinant human lactoferrin was well tolerated and stimulated intestinal cell proliferation and increased villus length and crypt depth in piglets. Lactoferrin also influenced both systemic and GI immune development by stimulating a balanced T-helper-1/T-helper-2 cytokine immune response. Further, there was a tendency for immune cells to secrete more anti-inflammatory cytokines in an unstimulated state, while being primed for a robust pro-inflammatory response when presented with a bacterial trigger in piglets fed lactoferrin. These findings support clinical studies demonstrating benefits of dietary lactoferrin in the prevention of infections, late onset sepsis, and necrotizing enterocolitis.