The developing brain is exquisitely sensitive to both endogenous and exogenous signals which direct or significantly alter the developmental trajectory of cells, neural circuits, and associated behavioral outcomes for the life of the individual. Contrary to initial dogma that the brain is one of the few organs within the body that is immune-privileged, evidence indicates that the immune system has a critical role in brain function during development as well as during sickness and health in adulthood. Microglia are the primary immune cells within the brain, and they are in constant communication with the peripheral immune system and surrounding cell types within the brain. We describe the important role of the immune system, including microglia, during brain development, and discuss some of the many ways in which immune activation during early brain development can affect the later-life outcomes of neural function, immune function, and cognition. Growing evidence indicates that there is a strong link between many neuropsychiatric disorders and immune dysfunction, with a distinct etiology in neurodevelopment. Thus, understanding the role of the immune system and immune activation during the critical period of brain development is a necessary step toward understanding the potential origins of these devastating disorders.