Monocyte-derived macrophage (MΦ) subsets are generated by antagonistic induction pathways. A helper MΦ-type (Mh-MΦ) is induced by interferon gamma (IFN-γ), whereas a cytotoxic MΦ-type (Mc-MΦ), induced by interleukin-10 (IL-10), is a potent mediator of antibody-dependent cellular cytotoxicity (ADCC). Compared with MΦ from healthy adults [peripheral blood monocyte-derived macrophages (PBMΦ)], cord blood MΦ (CBMΦ) were found less capable of generating Mh-MΦ. Here we tested the hypothesis that their generation of Mc-MΦ via IL-10 is also impaired. MΦ surface markers were phenotyped. IL-10 protein and mRNA production were detected after stimulation [αCD3 monoclonal antibody (mAb)]. CBMΦ or PBMΦ were co-cultured with MΦ-depleted mononuclear cells of adults and CD4-targeting antibodies as models for ADCC were added. In cord blood, we found diminished αCD3-induced IL-10 protein and mRNA production (p < 0.05 versus adults). Basal CD16 and HLA-DR expressions on CBMΦ of preterm and full-term neonates were lower (p < 0.05 versus PBMΦ). IL-10 had reduced effects on CD16 up- and HLA-DR down-modulation on CBMΦ (p < 0.05 versus PBMΦ). CD4-directed receptor modulation and deletion were reduced in the presence of CBMΦ (p < 0.05 versus PBMΦ). IL-10 failed to enhance their ADCC capacity, which was in contrast to PBMΦ (p < 0.05). These data suggest that CBMΦ have an impaired cytotoxic capacity via lower sensitivity toward IL-10.