Epidemiological studies link traffic-related air pollution (TRAP) to increased risk for various neurodevelopmental disorders (NDDs); however, there are limited preclinical data demonstrating a causal relationship between TRAP and adverse neurodevelopmental outcomes. Moreover, much of the preclinical literature reports effects of concentrated ambient particles or diesel exhaust that do not recapitulate the complexity of real-world TRAP exposures. To assess the developmental neurotoxicity of more realistic TRAP exposures, we exposed male and female rats during gestation and early postnatal development to TRAP drawn directly from a traffic tunnel in Northern California and delivered to animals in real-time. We compared NDD-relevant neuropathological outcomes at postnatal days 51–55 in TRAP-exposed animals versus control subjects exposed to filtered air. As indicated by immunohistochemical analyses, TRAP significantly increased microglial infiltration in the CA1 hippocampus, but decreased astrogliosis in the dentate gyrus. TRAP exposure had no persistent effect on pro-inflammatory cytokine levels in the male or female brain, but did significantly elevate the anti-inflammatory cytokine IL-10 in females. In male rats, TRAP significantly increased hippocampal neurogenesis, while in females, TRAP increased granule cell layer width. TRAP had no effect on apoptosis in either sex. Magnetic resonance imaging revealed that TRAP-exposed females, but not males, also exhibited decreased lateral ventricular volume, which was correlated with increased granule cell layer width in the hippocampus in females. Collectively, these data indicate that exposure to real-world levels of TRAP during gestation and early postnatal development modulate neurodevelopment, corroborating epidemiological evidence of an association between TRAP exposure and increased risk of NDDs.