Metabolic endotoxemia, commonly derived from gut dysbiosis, is a primary cause of chronic low grade inflammation that underlies many chronic diseases. Here we show that mice fed a diet high in omega-6 fatty acids exhibit higher levels of metabolic endotoxemia and systemic low-grade inflammation, while transgenic conversion of tissue omega-6 to omega-3 fatty acids dramatically reduces endotoxemic and inflammatory status. These opposing effects of tissue omega-6 and omega-3 fatty acids can be eliminated by antibiotic treatment and animal co-housing, suggesting the involvement of the gut microbiota. Analysis of gut microbiota and fecal transfer revealed that elevated tissue omega-3 fatty acids enhance intestinal production and secretion of intestinal alkaline phosphatase (IAP), which induces changes in the gut bacteria composition resulting in decreased lipopolysaccharide production and gut permeability, and ultimately, reduced metabolic endotoxemia and inflammation. Our findings uncover an interaction between host tissue fatty acid composition and gut microbiota as a novel mechanism for the anti-inflammatory effect of omega-3 fatty acids. Given the excess of omega-6 and deficiency of omega-3 in the modern Western diet, the differential effects of tissue omega-6 and omega-3 fatty acids on gut microbiota and metabolic endotoxemia provide insight into the etiology and management of today's health epidemics.