Intestinal dysbiosis is associated with a large number of disease processes including necrotizing enterocolitis and late-onset sepsis in preterm infants and colic and antibiotic-associated diarrhea in term infants. Probiotic microbes are increasingly administered to infants with the intent of decreasing risk of these acute diseases as well as chronic diseases of childhood such as asthma and atopic disease. The mechanisms by which probiotics decrease inflammation, decrease intestinal permeability, alter the intestinal microbiota, and influence metabolism have been discovered through both in vitro studies and in vivo in animal models. We review key mechanisms by which probiotic microbes improve health with emphasis on recent discoveries in the field.