The fetus and the neonate are particularly vulnerable to injury caused directly by immunologic mechanisms or inflicted by infectious agents that take advantage of their relatively immature and inexperienced immune system. With increasing survival of high-risk neonates in the surfactant era, prevention/treatment of sepsis and chronic lung disease (CLD) has emerged as an area of priority in neonatal research. Considering the role of inflammatory mediators in the pathogenesis of sepsis and CLD, the clinical application of immunomodulator therapy to neonatology is perhaps more important at present than ever. Advances in molecular biology and immunology have led to development of newer immune modulator therapies that are directed towards specific cells or cytokines rather than resulting in a general suppression of the immune response. Failure of promising, newer immunomodulator therapies in sepsis trials in adults has, however, clearly documented the difficulties in diagnosing/correcting the imbalance between pro- and anti-inflammatory responses. As in the case of sepsis, development of a single magic bullet for prevention/management of a multi-factorial illness like CLD may be difficult, as prevention of prematurity - the single most important high-risk factor for CLD - is an unachievable goal at present. As new frontiers are being explored, older, well-established therapies like antenatal anti-D immunoglobulin prophylaxis continue to emphasize the tremendous potential of immunomodulator therapy in neonatology/perinatology. The current immunomodulators/immunotherapeutic agents with established/potential clinical applications in the perinatal period are reviewed.