The capacity of microbial products to inhibit allergic inflammation make them logical candidates for novel therapies in allergic diseases such as atopic dermatitis. To assess the effects of intradermal Mycobacterium vaccae derivative on allergen-specific immune responses in children with moderate to severe atopic dermatitis. Peripheral blood mononuclear cells were isolated from children aged 5–16 years who received intradermal injections of M. vaccae derivative AVACTM (n = 26) or placebo (n = 34) three times at 2-weekly intervals, weeks 0, 2 and 4. Cytokine [interleukin (IL)-13, interferon (IFN)-γ and IL-10] responses to allergen [house dust mite (HDM)], mitogen [phytohaemagglutinin (PHA)], Staphylococcal enterotoxin B (SEB) and Toll-like receptor (TLR) ligands were assessed. At week 8 (1 month after all injections given) children in the AVAC group showed a significant increase in IL-10 (P = 0·009), T helper type 1 (Th1) IFN-γ (P = 0·017) and Th2 IL-13 (P = 0·004) responses to HDM compared with baseline (week 0). There were no significant changes in any cytokine production in the placebo. HDM-specific IL-10 responses remained significantly higher (P = 0·014) than at baseline in the AVAC group by week 12; however, the HDM-specific IL-13 and IFN-γ responses were no longer significantly different from baseline. IL-13 (r = 0·46, P < 0·001) and IL-10 (r = 0·27, P = 0·044) responses to HDM were correlated with total immunoglobulin E but not with disease severity. There were no effects of AVAC on mitogen, SEB, TLR-2- or TLR-4-mediated responses. This M. vaccae derivative appeared to modulate responses to HDM selectively, suggesting the capacity for in vivo effects on allergen-specific immune responses.