Intestinal epithelial cells function, in part, to detect infection with pathogenic organisms and are key regulators of intestinal immune homeostasis. However, it is not fully understood how intestinal epithelial cells sense pathogen infection and coordinate the induction of protective immune defenses. Here, we define two new mechanisms of innate immune regulation in a metazoan host. First, we characterize the first bacterial pattern recognition receptor and its natural ligand in Caenorhabditis elegans. We show that the C. elegans nuclear hormone receptor NHR-86/HNF4 directly senses phenazine-1-carboxamide (PCN), a metabolite produced by pathogenic strains of Pseudomonas aeruginosa. PCN binds to the ligand-binding domain of NHR-86/HNF4, a ligand-gated transcription factor, and activates innate immunity in intestinal epithelial cells. In addition, we show that C. elegans NHR-86 senses PCN, and not other phenazine metabolites, as a marker of pathogen virulence to engage protective anti-pathogen defenses. Second, we show that a phase transition of the C. elegans Toll/interleukin-1 receptor domain protein (TIR-1) controls signaling by the C. elegans p38 PMK-1 MAPK pathway. Physiologic stress, both P. aeruginosa infection and sterol scarcity, induce multimerization of TIR-1 within intestinal epithelial cells. Like the mammalian homolog of TIR-1, SARM1, oligomerization and phase transition of C. elegans TIR-1 dramatically potentiate its NAD+ glycohydrolase activity. TIR-1/SARM1 multimerization and NAD+ glycohydrolase activity are required for activation of C. elegans p38 PMK-1 pathway signaling and pathogen resistance. These data uncover a mechanism by which nematodes interpret environmental conditions to prime innate immune defenses and promote survival in microbe rich environments. C. elegans animals augment these immune defenses by surveying for ligands specifically associated with toxigenic pathogens that are poised to cause disease. These findings define a new paradigm of intestinal immune control that informs the evolution of innate immunity in all metazoans.