Environmental changes affecting the relationship between the developing immune system and microbial exposure have been implicated in the epidemic rise of allergic disease in developed countries. While early developmental differences in T cell function are well-recognised, there is now emerging evidence that this is related to developmental differences in innate immune function. In this study we sought to examine if differences associated with innate immunity contribute to the altered immune programming recognised in allergic children. Here, we describe for the first time, the association of carriage of the T allele of the tagging single nucleotide polymorphism rs12979860 3 kb upstream of IL28B, encoding the potent innate immune modulator type III interferon lambda (IFN-λ3), and allergy in children (p = 0.004; OR 4.56). Strikingly, the association between rs12979860 genotype and allergic disease is enhanced in girls. Furthermore, carriage of the T allele at rs12979860 correlates with differences in the pro-inflammatory profile during the first five years of life suggesting this contributes to the key differences in subsequent innate immune development in children who develop allergic disease. In the context of rising rates of disease, these immunologic differences already present at birth imply very early interaction between genetic predisposition and prenatal environmental influences.