ABSTRACT Fatty acid desaturation is central to metazoan lipid metabolism and provides building blocks of membrane lipids and precursors of diverse signaling molecules. Nutritional conditions and associated microbiota regulate desaturase expression 1–4 , but the underlying mechanisms have remained unclear. Here, we show that endogenous and microbiota-dependent small molecule signals promote lipid desaturation via the nuclear receptor NHR-49/PPARα in C. elegans . Untargeted metabolomics of a β-oxidation mutant, acdh-11 , in which expression of the stearoyl-CoA desaturase FAT-7/SCD1 is constitutively increased, revealed accumulation of a β- cyclopropyl fatty acid, becyp#1, that potently activates fat-7 expression via NHR-49. Biosynthesis of becyp#1 is strictly dependent on expression of cyclopropane synthase by associated bacteria, e.g., E. coli . Screening for structurally related endogenous metabolites revealed a β-methyl fatty acid, bemeth#1, whose activity mimics that of microbiota-dependent becyp#1, but is derived from a methyltransferase, fcmt-1 , that is conserved across Nematoda and likely originates from bacterial cyclopropane synthase via ancient horizontal gene transfer. Activation of fat-7 expression by these structurally similar metabolites is controlled by distinct mechanisms, as microbiota-dependent becyp#1 is metabolized by a dedicated β-oxidation pathway, while the endogenous bemeth#1 is metabolized via α-oxidation. Collectively, we demonstrate that evolutionarily related biosynthetic pathways in metazoan host and associated microbiota converge on NHR-49/PPARα to regulate fat desaturation.