The brain reciprocally communicates with the rest of the body via neural, endocrine, immune, and other systems. This is crucial for coordinating the complex behavioral and physiological responses needed to cope with the many challenges of life. The Anterior Cingulate Cortex (ACC) is a key brain structure involved in assessing rewards and threats, as well as activating appropriate responses. This is a dynamic process that depends on evolving needs and challenges. Important challenges include illness or injury. These typically involve inflammation and pain, which evoke neuroinflammatory processes in the brain to drive sickness behaviours. In the short term, sickness behaviours are considered adaptive, as they promote convalescence (e.g. low mood; lethargy, fatigue, social withdrawal), and enhanced threat appraisal (e.g. anxiety) to combat increased risk/vulnerability associated with sickness. Chronic inflammation, however, appears to remodel the system to inappropriately activate threat-coping responses, resulting in depressive and/or anxious phenotypes. These mood disorders are particularly pronounced in diseases and disorders associated with gut dysfunction, which feature chronic inflammation and altered ACC function. We propose that chronic inflammation remodels ACC physiology such that it errantly predicts heightened danger based on a mental model (a.k.a ‘schema’) of the world. This evokes chronic activation of threat-coping systems, including endocrine signaling (e.g. adrenaline), and anxiety. Inflammation can be driven by brain systems involving ACC, leading to a feedback-cycle that self-reinforces pathological states. This theory accounts for a wealth of clinical and preclinical data that implicate the ACC in disorders of mood and gastrointestinal function, and reveals a key player in the gut-brain axis that may represent a novel therapeutic target.