Microbial colonization of the mammalian intestine elicits inflammatory or tolerogenic T cell responses, but the mechanisms controlling these distinct outcomes remain poorly understood, and accumulating evidence indicates that aberrant immunity to intestinal microbiota is causally associated with infectious, inflammatory and malignant diseases1-8. Here we define a critical pathway controlling the fate of inflammatory versus tolerogenic T cells that respond to the microbiota and express the transcription factor RORγt. We profiled all RORγt+ immune cells at single-cell resolution from the intestine-draining lymph nodes of mice and reveal a dominant presence of T regulatory (Treg) cells and lymphoid tissue inducer-like group 3 innate lymphoid cells (ILC3s), which co-localize at interfollicular regions. These ILC3s are distinct from extrathymic AIRE-expressing cells, abundantly express major histocompatibility complex class II, and are necessary and sufficient to promote microbiota-specific RORγt+ Treg cells and prevent their expansion as inflammatory T helper 17 cells. This occurs through ILC3-mediated antigen presentation, αV integrin and competition for interleukin-2. Finally, single-cell analyses suggest that interactions between ILC3s and RORγt+ Treg cells are impaired in inflammatory bowel disease. Our results define a paradigm whereby ILC3s select for antigen-specific RORγt+ Treg cells, and against T helper 17 cells, to establish immune tolerance to the microbiota and intestinal health.