Metabolites derived from the intestinal microbiota, including bile acids (BA), extensively modulate vertebrate physiology, including development, metabolism, immune responses and cognitive function. However, to what extent host responses balance the physiological effects of microbiota-derived metabolites remains unclear. Here, using untargeted metabolomics of mouse tissues, we identified a family of BA-methylcysteamine (BA-MCY) conjugates that are abundant in the intestine and dependent on vanin 1 (VNN1), a pantetheinase highly expressed in intestinal tissues. This host-dependent MCY conjugation inverts BA function in the hepatobiliary system. Whereas microbiota-derived free BAs function as agonists of the farnesoid X receptor (FXR) and negatively regulate BA production, BA-MCYs act as potent antagonists of FXR and promote expression of BA biosynthesis genes in vivo. Supplementation with stable-isotope-labelled BA-MCY increased BA production in an FXR-dependent manner, and BA-MCY supplementation in a mouse model of hypercholesteraemia decreased lipid accumulation in the liver, consistent with BA-MCYs acting as intestinal FXR antagonists. The levels of BA-MCY were reduced in microbiota-deficient mice and restored by transplantation of human faecal microbiota. Dietary intervention with inulin fibre further increased levels of both free BAs and BA-MCY levels, indicating that BA-MCY production by the host is regulated by levels of microbiota-derived free BAs. We further show that diverse BA-MCYs are also present in human serum. Together, our results indicate that BA-MCY conjugation by the host balances host-dependent and microbiota-dependent metabolic pathways that regulate FXR-dependent physiology.