Interleukin (IL) 17-secreting CD4(+) helper T cells (Th17 cells) are essential for host defense at mucosal surfaces, and Th17 cell dysregulation can result in autoimmunity. Exposure to microbial products, such as bacterial LPS, can affect the ability of dendritic cells (DCs) to polarize Th17 cells. Acyloxyacyl hydrolase (AOAH) is a mammalian enzyme expressed by antigen (Ag)-presenting cells that deacylates and thereby inactivates LPS in host tissues. We hypothesized that inactivation of intestinal microbiota-derived LPS by AOAH influences the ability of DCs to polarize and generate Th17 effector cells. We found that LPS-containing Gram-negative microbiota augmented the differentiation of Ag-specific Th17 cells, and identified a colonic DC subset (CD103(+)CD11b(+)ALDH(-)) displaying a unique capacity to both express AOAH and polarize Th17 cells. Compared with WT, these Aoah(-/-) colonic DCs produce less IL-6, resulting in diminished Ag-specific Th17 polarization and increased regulatory T-cell induction in vitro. Oral administration of LPS led to reduced IL-6 production from CD103(+)CD11b(+)ALDH(-) colonic DCs in Aoah(-/-) mice compared with Aoah(+/+) mice, resulting in an abrogated Ag-specific Th17 response in the colon after mucosal immunization that could be rescued by systemic delivery of recombinant IL-6. These data identify the ability of AOAH to modulate microbiota signals that drive Th17 polarization and influence mucosal T-cell immunity, and suggest that host pathways to handle microbiota-derived products may be targeted to modulate Th17 responses in the context of inflammatory disorders or infection at mucosal surfaces.