The gut microbiota has a crucial role in immune development in early life. Sanidad et al. show that the mouse neonatal small intestine has a distinct microbiota compared with the adult small intestine and is enriched in neurotransmitters, including serotonin (5-HT). Both human and mouse neonates were found to have an increased abundance of 5-HT-producing bacteria in the small intestine. Gut bacteria in neonates further maximized 5-HT availability by inducing the enzyme TPH1, which promotes the conversion of tryptophan to 5-HT, and by downregulating MAO-A, an enzyme that breaks down 5-HT. In neonates, but not adults, 5-HT directly affected T cell metabolism. In particular, it increased levels of indole-3-acetaldehyde (I3A), which inhibits the mTOR pathway and promotes the development of regulatory T (Treg) cells. Oral gavage of neonatal (but not adult) mice with 5-HT promoted systemic and lasting antigen-specific immune tolerance to dietary antigens and commensal bacteria. This demonstrates a mechanism by which gut bacteria can promote oral tolerance in early life.