Although much research has been done on the diversity of the gut microbiome, little is known about how it influences intestinal homeostasis under normal and pathogenic conditions. Epigenetic mechanisms have recently been suggested to operate at the interface between the microbiota and the intestinal epithelium. We performed whole-genome bisulfite sequencing on conventionally raised and germ-free mice, and discovered that exposure to commensal microbiota induced localized DNA methylation changes at regulatory elements, which are TET2/3-dependent. This culminated in the activation of a set of 'early sentinel' response genes to maintain intestinal homeostasis. Furthermore, we demonstrated that exposure to the microbiota in dextran sodium sulfate-induced acute inflammation results in profound DNA methylation and chromatin accessibility changes at regulatory elements, leading to alterations in gene expression programs enriched in colitis- and colon-cancer-associated functions. Finally, by employing genetic interventions, we show that microbiota-induced epigenetic programming is necessary for proper intestinal homeostasis in vivo.