All metazoan guts are in constant contact with diverse food-borne microorganisms. The signaling mechanisms by which the host regulates gut-microbe interactions, however, are not yet clear. Here, we show that phospholipase C-@b (PLC@b) signaling modulates dual oxidase (DUOX) activity to produce microbicidal reactive oxygen species (ROS) essential for normal host survival. Gut-microbe contact rapidly activates PLC@b through G@aq, which in turn mobilizes intracellular Ca^2^+ through inositol 1,4,5-trisphosphate generation for DUOX-dependent ROS production. PLC@b mutant flies had a short life span due to the uncontrolled propagation of an essential nutritional microbe, Saccharomyces cerevisiae, in the gut. Gut-specific reintroduction of the PLC@b restored efficient DUOX-dependent microbe-eliminating capacity and normal host survival. These results demonstrate that the G@aq-PLC@b-Ca^2^+-DUOX-ROS signaling pathway acts as a bona fide first line of defense that enables gut epithelia to dynamically control yeast during the Drosophila life cycle.