The present review examines the role of dietary nucleotides in infants, and the scientific rationale and benefits of nucleotide supplementation of infant formula. The immunoprotective benefits of human milk, the biology of human milk nucleotides, and the immunological and gastrointestinal effects of dietary nucleotides in animal studies and in vitro experiments are examined. Clinical studies are reviewed, especially those examining the efficacy of nucleotide-supplemented infant formula in enhancing immunity and reducing the risk of sepsis. The presence of human milk cells, and a variety of immunoactive and trophic components of human milk, can explain the reduced incidence of sepsis in breastfed term and preterm infants. Nucleotides, believed to play an immunomodulatory role, are found in lower concentrations in infant formula. Animal studies have shown that dietary nucleotides enhance a number of immune responses and the growth, differentiation and repair of the gut. Several clinical studies have reported beneficial effects of nucleotide supplementation on gut microflora, diarrhoea and immune function, and one study has reported better catch-up growth in term infants with severe intrauterine growth retardation. More basic research studying the metabolism of nucleotides in neonates is encouraged. Additional randomized controlled trials are necessary to demonstrate the clinical benefits of nucleotide supplementation of infant formula, as it cannot be presumed that nucleotides produce the same benefits for the infant as human milk. Studies are especially necessary in high-risk neonatal situations, such as extreme prematurity, significant suboptimal nutrient intake before and after birth, and recovery from gut injury.