The microbiota modulates gut immune homeostasis. Bacteria influence the development and function of host immune cells, including T helper cells expressing interleukin-17A (T_H17 cells). We previously reported that the bile acid metabolite 3-oxolithocholic acid (3-oxoLCA) inhibits T_H17 cell differentiation¹. Although it was suggested that gut-residing bacteria produce 3-oxoLCA, the identity of such bacteria was unknown, and it was unclear whether 3-oxoLCA and other immunomodulatory bile acids are associated with inflammatory pathologies in humans. Here we identify human gut bacteria and corresponding enzymes that convert the secondary bile acid lithocholic acid into 3-oxoLCA as well as the abundant gut metabolite isolithocholic acid (isoLCA). Similar to 3-oxoLCA, isoLCA suppressed T_H17 cell differentiation by inhibiting retinoic acid receptor-related orphan nuclear receptor-γt, a key T_H17-cell-promoting transcription factor. The levels of both 3-oxoLCA and isoLCA and the 3α-hydroxysteroid dehydrogenase genes that are required for their biosynthesis were significantly reduced in patients with inflammatory bowel disease. Moreover, the levels of these bile acids were inversely correlated with the expression of T_H17-cell-associated genes. Overall, our data suggest that bacterially produced bile acids inhibit T_H17 cell function, an activity that may be relevant to the pathophysiology of inflammatory disorders such as inflammatory bowel disease.