The commensal flora can promote both immunity to pathogens and mucosal inflammation. How commensal-driven inflammation is regulated in the context of infection remains poorly understood. Here, we show that during acute mucosal infection of mice with Toxoplasma gondii, inflammatory monocytes acquire a tissue-specific regulatory phenotype associated with production of the lipid mediator prostaglandin E₂ (PGE₂). Notably, in response to commensals, inflammatory monocytes can directly inhibit neutrophil activation in a PGE₂-dependent manner. Further, in the absence of inflammatory monocytes, mice develop severe neutrophil-mediated pathology in response to pathogen challenge that can be controlled by PGE₂ analog treatment. Complementing these findings, inhibition of PGE₂ led to enhanced neutrophil activation and host mortality after infection. These data demonstrate a previously unappreciated dual action of inflammatory monocytes in controlling pathogen expansion while limiting commensal-mediated damage to the gut. Collectively, our results place inflammatory monocyte–derived PGE₂ at the center of a commensal-driven regulatory loop required to control host-commensal dialog during pathogen-induced inflammation.