Research on the neonatal microbiome has been performed mostly on hospital-born infants, who often undergo multiple birth-related interventions. Both the hospital environment and interventions around the time of birth may affect the neonate microbiome. In this study, we determine the structure of the microbiota in feces from babies born in the hospital or at home, and from vaginal samples of their mothers. We included 35 vaginally-born, breast-fed neonates, 14 of whom delivered at home (4 in water), and 21 who delivered in the hospital. Feces from babies and mothers and maternal vaginal swab samples were collected at enrollment, the day of birth, followed by days 1, 2, 7, 14, 21, and 28. At the time of birth, the diversity of the vaginal microbiota of mothers delivering in the hospital was higher than in mothers delivering at home, and showed higher proportion of Lactobacillus. Among 20 infants not exposed to perinatal maternal antibiotics or water birth, fecal beta diversity differed significantly by birth site, with hospital-born infants having lower Bacteroides, Bifidobacterium, Streptococcus, and Lactobacillus, and higher Clostridium and Enterobacteriaceae family (LDA > 3.0), than babies born at home. At 1 month of age, feces from infants born in the hospital also induced greater pro-inflammatory gene expression (TLR4, IL-8, occludin and TGFβ) in human colon epithelial HT-29 cells. The results of this work suggest that hospitalization (perinatal interventions or the hospital environment) may affect the microbiota of the vaginal source and the initial colonization during labor and birth, with effects that could persist in the intestinal microbiota of infants 1 month after birth. More research is needed to determine specific factors that alter bacterial transmission between mother and baby and the long-term health implications of these differences for the developing infant.