A nonsingular deflationary cosmology driven by adiabatic matter creation isproposed. In this scenario there is no preinflationary stage as happens inconventional inflationary models. Deflation starts from a de Sitter spacetimecharacterized by an arbitrary time scale $H_{I}^{-1}$, which also pins down aninitial value for the temperature of the universe. The model evolvescontinuously towards a slightly modified Friedman-Robertson-Walker universe.The horizon and other well known problems of the standard model are then solvedbut, unlike in microscopic models of inflation, there is no supercooling andsubsequent reheating. Entropy generation is concomitant with deflation and if$H_{I}^{-1}$ is of the order of the Planck time, the present day value of theradiation temperature is deduced. It is also shown that the ``age problem''does not exist here. In particular, the theoretically favored FRW flat model isold enough to agree with the observations even given the high values of $H_{o}$suggested by recent measurements.