Deregulation of host-microbiota interactions in the gut is a pivotal characteristic of Crohn’s disease. It remains unclear, however, whether commensals and/or the dysbiotic microbiota associated with pathology in humans are causally involved in Crohn’s pathogenesis. Here, we show that Crohn’s-like ileitis in Tnf ΔARE/+ mice is microbiota-dependent. Germ-free Tnf ΔARE/+ mice are disease-free and the microbiota and its innate recognition through Myd88 are indispensable for tumor necrosis factor (TNF) overexpression and disease initiation in this model. The epithelium of diseased mice shows no major defects in mucus barrier and paracellular permeability. However, Tnf ΔARE/+ ileitis associates with the reduction of lysozyme-expressing Paneth cells, mediated by adaptive immune effectors. Furthermore, we show that established but not early ileitis in Tnf ΔARE/+ mice involves defective expression of antimicrobials and dysbiosis, characterized by Firmicutes expansion, including epithelial-attaching segmented filamentous bacteria, and decreased abundance of Bacteroidetes. Microbiota modulation by antibiotic treatment at an early disease stage rescues ileitis. Our results suggest that the indigenous microbiota is sufficient to drive TNF overexpression and Crohn’s ileitis in the genetically susceptible Tnf ΔARE/+ hosts, whereas dysbiosis in this model results from disease-associated alterations including loss of lysozyme-expressing Paneth cells.