Physiologic microbe-host interactions in the intestine require the maintenance of the microbiota in a luminal compartment through a complex interplay between epithelial and immune cells. However, the roles of mucosal myeloid cells in this process remain incompletely understood. In this study, we identified that decreased myeloid cell phagocytic activity promotes colon tumorigenesis. We show that this is due to bacterial accumulation in the lamina propria and present evidence that the underlying mechanism is bacterial induction of prostaglandin production by myeloid cells. Moreover, we show that similar events in the normal colonic mucosa lead to reductions in Tuft cells, goblet cells, and the mucus barrier of the colonic epithelium. These alterations are again linked to the induction of prostaglandin production in response to bacterial penetration of the mucosa. Altogether, our work highlights immune cell-epithelial cell interactions triggered by the microbiota that control intestinal immunity, epithelial differentiation, and carcinogenesis.