Isolated lymphoid follicles (ILFs) develop after birth in the small and large intestines (SI and LI) and represent a dynamic response of the gut immune system to the microbiota. Despite their similarities, ILF development in the SI and LI differs on a number of levels. We show that unlike ILF in the SI, the microbiota inhibits ILF development in the colon as conventionalization of germ-free mice reduced colonic ILFs. From this, we identified a novel mechanism regulating colonic ILF development through the action of interleukin (IL)-25 on IL-23 and its ability to modulate T regulatory cell (Treg) differentiation. Colonic ILF develop in the absence of a number of factors required for the development of their SI counterparts and can be specifically suppressed by factors other than IL-25. However, IL-23 is the only factor identified that specifically promotes colonic ILFs without affecting SI-ILF development. Both IL-23 and ILFs are associated with inflammatory bowel disease, suggesting that disruption to this pathway may have an important role in the breakdown of microbiota-immune homeostasis.