The farnesoid X receptor (FXR) is a bile acid-regulated nuclear receptor expressed in enterohepatic tissues. In this study we investigated whether FXR is expressed by cells of innate immunity and regulates inflammation in animal models of colitis. Acute (7 days) and chronic (8 wk) colitis were induced in wild-type and FXR−/− mice by intrarectal administration of trinitrobenzensulfonic acid or by 7-day administration of 5% dextran sulfate in drinking water. The results of this experiment demonstrate that FXR is expressed by and exerts counterregulatory effects on cells of innate immunity. Exposure of LPS-activated macrophages to 6-ethyl chenodeoxycholic acid (6E-CDCA; INT-747) a synthetic FXR ligand, results in a reciprocal regulation of NF-κB dependent-genes (TNF-α, IL-1β, IL-6, COX-1, COX-2, and iNOS) and induction of SHP, a FXR-regulated gene. FXR activation stabilizes the nuclear corepressor NCoR on the NF-κB responsive element on the IL-1β promoter. Colon inflammation in Crohn’s disease patients and in rodent models of colitis is associated with a reduced expression of FXR mRNA. Using two rodent models of colon inflammation, we show that progression of these immune-mediated disorders is exacerbated in FXR−/− mice (p< 0.01). In vivo treatment with INT-747 attenuates organ injury and immune cell activation. FXR activation increased the colon expression of I-BABP, FXR, and SHP while reducing IL-1β, IL-2, IL-6, TNF-α, and IFN-γ mRNA expression and attenuating disease severity. In aggregate, these findings provide evidence that FXR is an essential component of a network of nuclear receptors that regulate intestinal innate immunity and homeostasis.