Inflammasomes are important for maintaining intestinal homeostasis, and dysbiosis contributes to the pathology of inflammatory bowel disease (IBD) and increases the risk for colorectal cancer. Inflammasome defects contribute to chronic intestinal inflammation and increase the susceptibility to colitis in mice. However, the inflammasome sensor absent in melanoma 2 (AIM2) protects against colorectal cancer in an inflammasome-independent manner through DNA-dependent protein kinase and Akt pathways. Yet, the roles of the AIM2 inflammasome in IBD and the early phases of colorectal cancer remain ill-defined. Here we show that the AIM2 inflammasome has a protective role in the intestine. During steady state, Aim2 deletion results in the loss of IL-18 secretion, suppression of the IL-22 binding protein (IL-22BP) in intestinal epithelial cells and consequent loss of the STAT3-dependent antimicrobial peptides (AMPs) Reg3β and Reg3γ, which promotes dysbiosis-linked colitis. During dextran sulfate sodium-induced colitis, a dysfunctional IL-18/IL-22BP pathway in Aim2-/- mice promotes excessive IL-22 production and elevated STAT3 activation. Aim2-/- mice further exhibit sustained STAT3 and Akt activation during the resolution of colitis fueled by enhanced Reg3b and Reg3g expression. This self-perpetuating mechanism promotes proliferation of intestinal crypt cells and likely contributes to the recently described increase in susceptibility of Aim2-/- mice to colorectal cancer. Collectively, our results demonstrate a central role for the AIM2 inflammasome in preventing dysbiosis and intestinal inflammation through regulation of the IL-18/IL-22BP/IL-22 and STAT3 pathway and expression of select AMPs.