The intestinal microbiota plays an important role in development of the immune system and regulation of immune responses. This review summarizes the association between the intestinal microbiota and the development of allergic sensitization, eczema, and asthma in neonates and children. Overall, a greater relative abundance of Bacteroidaceae, Clostridiaceae, and Enterobacteriaceae and a lower relative abundance of Bifidobacteriaceae and Lactobacillaceae is associated with the development of allergic sensitization, eczema, or asthma. Reduced bacterial diversity can be associated with the development of allergic disease. The association between the composition of the intestinal microbiota and the development of allergic disease or asthma is less consistent in older children than in neonates, suggesting that early-life microbial exposure plays a more important role. Inconsistencies in the results reported from different studies might partly be explained by heterogeneity in design, study populations, diagnostic criteria, microbiota analysis methods, and reporting on different taxonomic levels. Larger studies that better account for antenatal and postnatal factors will further help determine specific microbial intestinal signatures associated with increased risk of allergy and asthma. This will enable the early identification of infants at high risk and facilitate novel strategies and interventions to prevent and treat these conditions, including modifying the intestinal microbiota early in life.