The T cell compartment is considered to be naïve and dedicated to the development of tolerance during fetal development. We have identified and characterized a population of fetally developed CD4 T cells with an effector memory phenotype (TEM), which are present in cord blood. This population is polyclonal and has phenotypic features similar to those of conventional adult memory T cells, such as CD45RO expression. These cells express low levels of CD25 but are distinct from regulatory T cells because they lack Foxp3 expression. After T cell receptor activation, neonatal TEM cells readily produced tumor necrosis factor–α (TNF-α) and granulocyte-macrophage colony-stimulating factor (GM-CSF). We also detected interferon-γ (IFN-γ)–producing T helper 1 (TH1) cells and interleukin-4 (IL-4)/IL-13–producing TH2-like cells, but not IL-17–producing cells. We used chemokine receptor expression patterns to divide this TEM population into different subsets and identified distinct transcriptional programs using whole-genome microarray analysis. IFN-γ was found in CXCR3+ TEM cells, whereas IL-4 was found in both CXCR3+ TEM cells and CCR4+ TEM cells. CCR6+ TEM cells displayed a genetic signature that corresponded to TH17 cells but failed to produce IL-17A. However, the TH17 function of TEM cells was observed in the presence of IL-1β and IL-23. In summary, in the absence of reported pathology or any major infectious history, T cells with a memory-like phenotype develop in an environment thought to be sterile during fetal development and display a large variety of inflammatory effector functions associated with CD4 TH cells at birth.