Interleukin‐10 (IL‐10) is a key regulator of mucosal homeostasis. In the current study we investigated the early events after monoassociating germ‐free (GF) wild‐type (WT) mice with an Escherichia coli strain that we isolated previously from the caecal contents of a normal mouse housed under specific pathogen‐free conditions. Our results show that interferon‐γ (IFN‐γ) secreted by mesenteric lymph node (MLN) cells from both IL‐10 deficient mice and WT mice, stimulated ex vivo with E. coli lysate, was dramatically higher at day 4 after monoassociation compared with IFN‐γ secreted by cells from GF mice without E. coli colonization. Production of IFN‐γ rapidly and progressively declined after colonization of WT but not IL‐10‐deficient mice. The E. coli lysate‐stimulated WT MLN cells also produced IL‐10 that peaked at day 4 and subsequently declined, but not as precipitously as IFN‐γ. WT cells that express CD4, CD8 and NKp46 produced IFN‐γ; WT CD4‐positive cells and B cells produced IL‐10. Recombinant IL‐10 added to E. coli‐stimulated MLN cell cultures inhibited IFN‐γ secretion in a dose‐dependent fashion. MLN cells from WT mice treated in vivo with neutralizing anti‐IL‐10 receptor antibody produced more IFN‐γ compared with MLN cells from isotype control antibody‐treated mice. These findings show that a resident E. coli that induces chronic colitis in monoassociated IL‐10‐deficient mice rapidly but transiently activates the effector immune system in normal hosts, in parallel with induction of protective IL‐10 produced by B cells and CD4⁺ cells that subsequently suppresses this response to mediate mucosal homeostasis.