Interleukin-23 (IL-23) responsive group 3 innate lymphoid cells (ILC3s) have been implicated in immune homeostasis and pathogenesis in the adult, but little is known about their roles in the newborn. Here we show that IL-23 promotes conversion of embryonic intestinal Lin(-)IL-23R(+)Thy1(+) cells into IL-22-producing Thy1(+)Sca-1(hi) ILC3s in vitro. Gut-specific expression of IL-23 also activated and expanded Thy1(+)Sca-1(hi) ILC3s, which produced IL-22, IL-17, interferon gamma (IFN-γ), and granulocyte-macrophage colony-stimulating factor (GM-CSF) and were distinct from canonical CD4(+) lymphoid tissue inducer (LTi) cells. These ILC3s accumulated under the epithelium in intercellular adhesion molecule (ICAM)-1-positive cell aggregates together with neutrophils that disrupted the epithelium, leading to the formation of discrete intestinal erosions, bleeding, and neonatal death. Genetic and antibody depletion of ILC3s rescued the mice from neonatal death. Antibiotic treatment of pregnant mothers and offspring prolonged survival of IL-23 transgenic mice, suggesting a role for the commensal flora on ILC3-induced pathogenesis. Our results reveal a novel role for the IL-23-ILC3s axis in the pathogenesis of neonatal intestinal inflammation.