Infants with intrauterine growth restriction (IUGR) are at increased risk for neonatal and lifelong morbidities affecting multiple organ systems including the intestinal tract. The underlying mechanisms for the risk to the intestine remain poorly understood. In this study, we tested the hypothesis that IUGR affects the development of goblet and Paneth cell lineages, thus compromising the innate immunity and barrier functions of the epithelium. Using a mouse model of maternal thromboxane A2-analog infusion to elicit maternal hypertension and resultant IUGR, we tested whether IUGR alters ileal maturation and specifically disrupts mucus-producing goblet and antimicrobial-secreting Paneth cell development. We measured body weights, ileal weights and ileal lengths from birth to postnatal day (P) 56. We also determined the abundance of goblet and Paneth cells and their mRNA products, localization of cellular tight junctions, cell proliferation, and apoptosis to interrogate cellular homeostasis. Comparison of the murine findings with human IUGR ileum allowed us to verify observed changes in the mouse were relevant to clinical IUGR. At P14 IUGR mice had decreased ileal lengths, fewer goblet and Paneth cells, reductions in Paneth cell specific mRNAs, and decreased cell proliferation. These findings positively correlated with severity of IUGR. Furthermore, the decrease in murine Paneth cells was also seen in human IUGR ileum. IUGR disrupts the normal trajectory of ileal development, particularly affecting the composition and secretory products of the epithelial surface of the intestine. We speculate that this abnormal intestinal development may constitute an inherent "first hit", rendering IUGR intestine susceptible to further injury, infection, or inflammation.