Bile reflux gastritis (BRG) is associated with the development of gastric cancer (GC), but the specific mechanism remains elusive. Here, a comprehensive study is conducted to explore the roles of refluxed bile acids (BAs) and microbiome in gastric carcinogenesis. The results show that conjugated BAs, interleukin 6 (IL‐6), lipopolysaccharide (LPS), and the relative abundance of LPS‐producing bacteria are increased significantly in the gastric juice of both BRG and GC patients. A secondary BA, taurodeoxycholic acid (TDCA), is significantly and positively correlated with the LPS‐producing bacteria in the gastric juice of these patients. TDCA promotes the proliferation of normal gastric epithelial cells (GES‐1) through activation of the IL‐6/JAK1/STAT3 pathway. These results are further verified in two mouse models, one by gavage of TDCA, LPS, and LPS‐producing bacteria (Prevotella melaninogenica), respectively, and the other by bile reflux (BR) surgery, mimicking clinical bile refluxing. Moreover, the bile reflux induced gastric precancerous lesions observed in the post BR surgery mice can be prevented by treatment with cryptotanshinone, a plant‐derived STAT3 inhibitor. These results reveal an important underlying mechanism by which bile reflux promotes gastric carcinogenesis and provide an alternative strategy for the prevention of GC associated with BRG.