The gut microbiota is associated with metabolic diseases including obesity, insulin resistance and non-alcoholic fatty liver disease (NAFLD), as demonstrated by correlative studies and by transplant of microbiota from obese humans and mice into germ-free mice. Modification of the microbiota by treatment of high-fat diet (HFD)-fed mice with tempol or antibiotics resulted in decreased adverse metabolic phenotypes. This was due to lower levels of the genera Lactobacillus and decreased bile salt hydrolase (BSH) activity. The decreased BSH resulted in increased levels of tauro-β-muricholic acid (T-β-MCA), a substrate of BSH and a potent farnesoid X receptor (FXR) antagonist. Mice lacking expression of FXR in the intestine were resistant to HFD-induced obesity, insulin resistance and NAFLD thus confirming that intestinal FXR is involved in the potentiation of metabolic disease. A potent intestinal FXR antagonist glycine-β-muricholic acid (Gly-MCA) that is resistant to BSH, was developed that when administered to HFD-treated mice, mimics the effect of the altered microbiota on HFD-induced metabolic disease. Gly-MCA had similar effects on genetically obese leptin-deficient mice. The decreased in adverse metabolic phenotype by tempol, antibiotics and Gly-MCA was due to decreased serum ceramides. Mice lacking FXR in intestine also have lower serum ceramides, are metabolic fit and resistant to HFD-induced metabolic disease, and this is reversed by injection of C16:0 ceramide. In mouse ileum, due to the presence of endogenous FXR agonists produced in the liver, FXR target genes involved in ceramide synthesis are activated and when Gly-MCA is administered, they are repressed, which likely accounts for the decrease in serum ceramides. These studies reveal that ceramides produced in the ileum under control of FXR, influence metabolic diseases.