The gut bile acid pool is millimolar in concentration, varies widely in composition among individuals and is linked to metabolic disease and cancer. Although these molecules are derived almost exclusively from the microbiota, remarkably little is known about which bacterial species and genes are responsible for their biosynthesis. Here we report a biosynthetic pathway for the second most abundant class in the gut, 3β-hydroxy(iso)-bile acids, whose levels exceed 300 μM in some humans and are absent in others. We show, for the first time, that iso–bile acids are produced by Ruminococcus gnavus, a far more abundant commensal than previously known producers, and that the iso–bile acid pathway detoxifies deoxycholic acid and thus favors the growth of the keystone genus Bacteroides. By revealing the biosynthetic genes for an abundant class of bile acids, our work sets the stage for predicting and rationally altering the composition of the bile acid pool.