Background & Aims: After birth, the immune system matures via interactions with microbes in the gut. The S100 calcium binding proteins S100A8 and S100A9, and their extracellular complex form, S100A8–A9, are found in high amounts in human breast milk. We studied levels of S100A8–A9 in fecal samples (also called fecal calprotectin) from newborns and during infancy, and their effects on development of the intestinal microbiota and mucosal immune system. Methods: We collected stool samples (n = 517) from full-term (n = 72) and preterm infants (n = 49) at different timepoints over the first year of life (days 1, 3, 10, 30, 90, 180, and 360). We measured levels of S100A8–A9 by enzyme-linked immunosorbent assay and analyzed fecal microbiomes by 16S sRNA gene sequencing. We also obtained small and large intestine biopsies from 8 adults and 10 newborn infants without inflammatory bowel diseases (controls) and 8 infants with necrotizing enterocolitis and measured levels of S100A8 by immunofluorescence microscopy. Children were followed for 2.5 years and anthropometric data and medical information on infections were collected. We performed studies with newborn C57BL/6J wild-type and S100a9–/– mice (which also lack S100A8). Some mice were fed or given intraperitoneal injections of S100A8 or subcutaneous injections of Staphylococcus aureus. Blood and intestine, mesenterial and celiac lymph nodes were collected; cells and cytokines were measured by flow cytometry and studied in cell culture assays. Colon contents from mice were analyzed by culture-based microbiology assays. Results: Loss of S100A8 and S100A9 in mice altered the phenotypes of colonic lamina propria macrophages, compared with wild-type mice. Intestinal tissues from neonatal S100-knockout mice had reduced levels of CX3CR1 protein, and Il10 and Tgfb1 mRNAs, compared with wild-type mice, and fewer T-regulatory cells. S100-knockout mice weighed 21% more than wild-type mice at age 8 weeks and a higher proportion developed fatal sepsis during the neonatal period. S100-knockout mice had alterations in their fecal microbiomes, with higher abundance of Enterobacteriaceae. Feeding mice S100 at birth prevented the expansion of Enterobacteriaceae, increased numbers of T-regulatory cells and levels of CX3CR1 protein and Il10 mRNA in intestine tissues, and reduced body weight and death from neonatal sepsis. Fecal samples from term infants, but not preterm infants, had significantly higher levels of S100A8–A9 during the first 3 months of life than fecal samples from adults; levels decreased to adult levels after weaning. Fecal samples from infants born by cesarean delivery had lower levels of S100A8–A9 than from infants born by vaginal delivery. S100 proteins were expressed by lamina propria macrophages in intestinal tissues from infants, at higher levels than in intestinal tissues from adults. High fecal levels of S100 proteins, from 30 days to 1 year of age, were associated with higher abundance of Actinobacteria and Bifidobacteriaceae, and lower abundance of Gammaproteobacteria—particularly opportunistic Enterobacteriaceae. A low level of S100 proteins in infants’ fecal samples associated with development of sepsis and obesity by age 2 years. Conclusion: S100A8 and S100A9 regulate development of the intestinal microbiota and immune system in neonates. Nutritional supplementation with these proteins might aide in development of preterm infants and prevent microbiota-associated disorders in later years.