Conjugated bile acids are metabolised by upper small intestinal microbiota, and serum levels of taurine-conjugated bile acids are elevated and correlated with insulin resistance in people with type 2 diabetes. However, whether changes in taurine-conjugated bile acids are necessary for small intestinal microbiome to alter insulin action remain unknown.We evaluated circulating and specifically brain insulin action using the pancreatic-euglycaemic clamps in high-fat (HF) versus chow fed rats with or without upper small intestinal healthy microbiome transplant. Chemical and molecular gain/loss-of-function experiments targeting specific taurine-conjugated bile acid-induced changes of farnesoid X receptor (FXR) in the brain were performed in parallel.We found that short-term HF feeding increased the levels of taurochenodeoxycholic acid (TCDCA, an FXR ligand) in the upper small intestine, ileum, plasma and dorsal vagal complex (DVC) of the brain. Transplantation of upper small intestinal healthy microbiome into the upper small intestine of HF rats not only reversed the rise of TCDCA in all reported tissues but also enhanced the ability of either circulating hyperinsulinaemia or DVC insulin action to lower glucose production. Further, DVC infusion of TCDCA or FXR agonist negated the enhancement of insulin action, while genetic knockdown or chemical inhibition of FXR in the DVC of HF rats reversed insulin resistance.Our findings indicate that FXR in the DVC is sufficient and necessary for upper small intestinal microbiome-mediated changes of TCDCA to alter insulin action in rats, and highlight a previously unappreciated TCDCA-FXR axis linking gut microbiome and host insulin action.