Apolipoprotein E (APOE) regulates cholesterol and fatty acid metabolism, and may mediate synaptogenesis during neurodevelopment. To our knowledge, the effects of APOE4 isoforms on infant development have not been studied. This study was nested within a cohort of mother-infant pairs living in and around Mexico City. A multiple linear regression model was constructed using the 24-mo Mental Development Index (MDI) of the Bayley Scale as the primary outcome and infant APOE genotype as the primary risk factor of interest. Regression models stratified on APOE genotype were constructed to explore effect modification. Of 311 subjects, 53 (17%) carried at least one copy of the APOE4 allele. Mean (SD) MDI scores among carriers with at least one copy of APOE4 were 94.1 (14.3) and among E3/E2 carriers were 91.2 (14.0). After adjustment for covariates, APOE4 carrier status was associated with a 4.4 point (95% confidence interval: 0.1-8.7; p = 0.04) higher 24-mo MDI. In the stratified regression models, the negative effects for umbilical cord blood lead level on 24-mo MDI score was approximately 4-fold greater among APOE3/APOE2 carriers than among APOE4 carriers. These results suggest that subjects with the E4 isoform of APOE may have advantages over those with the E2 or E3 isoforms with respect to early life neuronal/brain development.