Gut microbiota-derived peptidoglycan fragments (PGNs) are potent inducers of Candida albicans hyphal growth, a key virulence trait for C. albicans pathogenesis in hosts. Herein, we identify the C. albicans oligopeptide transporter 4 (Opt4) as the long-sought major transporter responsible for internalizing a diverse range of natural PGNs into fungal cells. However, contrary to the conventional view, we reveal that blocking the cellular uptake of PGNs does not prevent C. albicans hyphal growth. Instead, we discover that extracellular sensing of PGNs by C. albicans cell surface protein Ssy1 is essential for activating the downstream cAMP-PKA pathway in hyphal signaling. Importantly, the ssy1Δ/Δ mutant, which is defective in PGN-induced hyphal growth, remains unresponsive to the β-lactam-induced PGN storm in the mouse gut. It predominantly maintains yeast morphology and shows no sign of systemic dissemination. These findings establish Ssy1 as a potential anti-virulence target for preventing PGN-induced invasive growth of C. albicans in hosts.