The gut microbiome consists of a multi-kingdom microbial community. Whilst the role of bacteria as causal contributors governing host physiological development is well established, the role of fungi remains to be determined. Here, we use germ-free mice colonized with defined species of bacteria, fungi, or both to differentiate the causal role of fungi on microbiome assembly, immune development, susceptibility to colitis, and airway inflammation. Fungal colonization promotes major shifts in bacterial microbiome ecology, and has an independent effect on innate and adaptive immune development in young mice. While exclusive fungal colonization is insufficient to elicit overt dextran sulfate sodium-induced colitis, bacterial and fungal co-colonization increase colonic inflammation. Ovalbumin-induced airway inflammation reveals that bacterial, but not fungal colonization is necessary to decrease airway inflammation, yet fungi selectively promotes macrophage infiltration in the airway. Together, our findings demonstrate a causal role for fungi in microbial ecology and host immune functionality, and therefore prompt the inclusion of fungi in therapeutic approaches aimed at modulating early life microbiomes.