The gut microbiota fundamentally regulates intestinal homeostasis and disease partially through mechanisms that involve modulation of regulatory T cells (Tregs), yet how the microbiota-Treg cross-talk is physiologically controlled is incompletely defined. Here, we report that prostaglandin E2 (PGE2), a well-known mediator of inflammation, inhibits mucosal Tregs in a manner depending on the gut microbiota. PGE2 through its receptor EP4 diminishes Treg-favorable commensal microbiota. Transfer of the gut microbiota that was modified by PGE2-EP4 signaling modulates mucosal Treg responses and exacerbates intestinal inflammation. Mechanistically, PGE2-modified microbiota regulates intestinal mononuclear phagocytes and type I interferon signaling. Depletion of mononuclear phagocytes or deficiency of type I interferon receptor diminishes PGE2-dependent Treg inhibition. Together, our findings provide emergent evidence that PGE2-mediated disruption of microbiota-Treg communication fosters intestinal inflammation.