The commensal flora can promote both immunity to pathogens and mucosal inflammation. How commensal-driven inflammation is regulated in the context of infection remains poorly understood. Here, we show that during acute mucosal infection of mice with Toxoplasma gondii, inflammatory monocytes acquire a tissue-specific regulatory phenotype associated with production of the lipid mediator prostaglandin E2 (PGE2). Notably, in response to commensals, inflammatory monocytes can directly inhibit neutrophil activation in a PGE2-dependent manner. Further, in the absence of inflammatory monocytes, mice develop severe neutrophil-mediated pathology in response to pathogen challenge that can be controlled by PGE2 analog treatment. Complementing these findings, inhibition of PGE2 led to enhanced neutrophil activation and host mortality after infection. These data demonstrate a previously unappreciated dual action of inflammatory monocytes in controlling pathogen expansion while limiting commensal-mediated damage to the gut. Collectively, our results place inflammatory monocyte-derived PGE2 at the center of a commensal-driven regulatory loop required to control host-commensal dialog during pathogen-induced inflammation.