High dietary fat intake can cause elevated serum and hepatic lipids, as well as contribute to gut dysbiosis, intestinal barrier dysfunction and increased circulating lipopolysaccharide (LPS). Dietary milk sphingomyelin (SM) has been shown to inhibit lipid absorption in rodents. We evaluated the effects of milk SM on lipid metabolism and LPS levels in C57BL/6J mice fed a high-fat diet for 4 weeks and compared it with egg SM. Mice were fed a high-fat diet (45% kcal from fat) (CTL, n = 10) or the same diet modified to contain 0.25% (wt/wt) milk SM (MSM, n = 10) or 0.25% (wt/wt) egg SM (ESM, n = 10). After 4 weeks, MSM had gained significantly less weight and had reduced serum cholesterol compared to CTL. ESM had increases in serum cholesterol, triglycerides, phospholipids and SM compared to CTL. MSM significantly decreased, while ESM increased, hepatic triglycerides. This may have been related to induction of hepatic stearoyl-CoA desaturase-1 mRNA observed in ESM. MSM displayed intestinal and hepatic gene expression changes consistent with cholesterol depletion. MSM had significantly lower serum LPS compared to CTL, which may have been due to altered distal gut microbiota. Fecal Gram-negative bacteria were significantly lower, while fecal Bifidobacterium were higher, in MSM. These results suggest that milk SM is more effective than egg SM at combating the detrimental effects of a high-fat diet in mice. Additionally, distal gut microbiota is altered with milk SM and this may have contributed to the lower serum LPS observed.