Infection of the developing fetus with human cytomegalovirus (HCMV) is a major cause of central nervous system disease in infants and children; however, mechanism(s) of disease associated with this intrauterine infection remain poorly understood. Utilizing a mouse model of HCMV infection of the developing CNS, we have shown that peripheral inoculation of newborn mice with murine CMV (MCMV) results in CNS infection and developmental abnormalities that recapitulate key features of the human infection. In this model, animals exhibit decreased granule neuron precursor cell (GNPC) proliferation and altered morphogenesis of the cerebellar cortex. Deficits in cerebellar cortical development are symmetric and global even though infection of the CNS results in a non-necrotizing encephalitis characterized by widely scattered foci of virus-infected cells with mononuclear cell infiltrates. These findings suggested that inflammation induced by MCMV infection could underlie deficits in CNS development. We investigated the contribution of host inflammatory responses to abnormal cerebellar development by modulating inflammatory responses in infected mice with glucocorticoids. Treatment of infected animals with glucocorticoids decreased activation of CNS mononuclear cells and expression of inflammatory cytokines (TNF-α, IFN-β and IFNγ) in the CNS while minimally impacting CNS virus replication. Glucocorticoid treatment also limited morphogenic abnormalities and normalized the expression of developmentally regulated genes within the cerebellum. Importantly, GNPC proliferation deficits were normalized in MCMV infected mice following glucocorticoid treatment. Our findings argue that host inflammatory responses to MCMV infection contribute to deficits in CNS development in MCMV infected mice and suggest that similar mechanisms of disease could be responsible for the abnormal CNS development in human infants infected in-utero with HCMV.