Eczema is very common and increasing in prevalence. Prospective studies investigating environmental and genetic risk factors for eczema in a birth cohort are lacking. We evaluated risk factors that may promote development of childhood eczema in the Cincinnati Childhood Allergy and Air Pollution Study (CCAAPS) birth cohort (n=762) of infants with at least one atopic parent. Objective environmental exposure data were available for each participant. At annual physical examinations, children underwent skin prick tests (SPTs), eczema was diagnosed by a clinician, and DNA was collected. Among Caucasian children, 39% developed eczema by age 3. Children with a pet dog were significantly less likely to have eczema at age one (odds ratio (OR)=0.62, 95% confidence interval (CI): 0.40-0.97) or at both ages 2 and 3 (OR=0.54, 95% CI: 0.30-0.97). This finding was most significant among children carrying the CD14-159C/T CC genotype. Carriers of the CD14-159C/T and IL4Ralpha I75V single-nucleotide polymorphisms (SNPs) had an increased risk of eczema at both ages 2 and 3 (OR=3.44, 95% CI: 1.56-7.57), especially among children who were SPT+. These results provide new insights into the pathogenesis of eczema in high-risk children and support a protective role for early exposure to dog, especially among those carrying the CD14-159C/T SNP. The results also demonstrate a susceptibility effect of the combination of CD14 and IL4Ralpha SNPs with eczema.