Longitudinal studies in infant populations using validated diagnostic criteria of atopic dermatitis and sensitization are rarely reported, and disease definitions, testing procedures, age of study population and evaluation of objective markers vary between countries and studies. The objectives of this prospective birth cohort study were to investigate: (i) the prevalence, the cumulative incidence and the pattern of transient and persistent sensitization to common food- and aeroallergens in unselected infants, (ii) the association between sensitization and the development of atopic dermatitis (AD) and (iii) the association between selected perinatal risk factors with respect to AD and post-natal sensitization. During a one-year period a cohort of 562 unselected newborns was established and followed up at the age of 3, 6, 9, 12 and 18 months of age. At all time points infants were examined clinically and by histamine release (HR), total- and specific immunoglobulin E (IgE) and skin prick test (SPT). Sensitization ever to ≥1 allergen at 18 months of age was 59%, 50% and 6% using HR, IgE and SPT, respectively. A transient sensitization to ≥1 allergen was found in 47%, 42% and 4% and a persistent sensitization in 17%, 10% and 3%, respectively. Sensitization to environmental allergens was frequently observed in infancy when testing with HR and IgE. Results of SPT gave much lower frequencies. Reactivity to foods was more frequent than to aeroallergens. The dominant pattern was low-level transient sensitization. This is important to know when sensitization tests are used in the course of examination of infants with eczematous skin diseases. Specific definitions of sensitization like persistent reactivity, high-level sensitization and poly sensitization were clearly associated with AD. A maternal history of AD was a valuable tool in predicting AD in early infancy; a similar finding was less obvious with regard to post-natal sensitization. Cord-specific IgE and cord-HR positive reactivity did not prove better tools than cord-total IgE in predicting AD within the first 18 living months.