At mucosal sites such as the intestine, the immune system launches robust immunity against invading pathogens while maintaining a state of tolerance to commensal flora and ingested food Ags. The molecular mechanisms underlying this phenomenon remain poorly understood. In this study, we report that signaling by GPR81, a receptor for lactate, in colonic dendritic cells and macrophages plays an important role in suppressing colonic inflammation and restoring colonic homeostasis. Genetic deletion of GPR81 in mice led to increased Th1/Th17 cell differentiation and reduced regulatory T cell differentiation, resulting in enhanced susceptibility to colonic inflammation. This was due to increased production of proinflammatory cytokines (IL-6, IL-1β, and TNF-α) and decreased expression of immune regulatory factors (IL-10, retinoic acid, and IDO) by intestinal APCs lacking GPR81. Consistent with these findings, pharmacological activation of GPR81 decreased inflammatory cytokine expression and ameliorated colonic inflammation. Taken together, these findings identify a new and important role for the GPR81 signaling pathway in regulating immune tolerance and colonic inflammation. Thus, manipulation of the GPR81 pathway could provide novel opportunities for enhancing regulatory responses and treating colonic inflammation.