Inducible regulatory T (iTreg) cells play a crucial role in immune suppression and are important for the maintenance of immune homeostasis. Mounting evidence has demonstrated connections between iTreg differentiation and metabolic reprogramming, especially rewiring in fatty acid oxidation (FAO). Previous work showed that butyrate, a specific type of short-chain fatty acid (SCFA) readily produced from fiber-rich diets through microbial fermentation, was critical for the maintenance of intestinal homeostasis and capable of promoting iTreg generation by up-regulating histone acetylation for gene expression as an HDAC inhibitor. Here, we revealed that butyrate could also accelerate FAO to facilitate iTreg differentiation. Moreover, butyrate was converted, by acyl-CoA synthetase short-chain family member 2 (ACSS2), into butyryl-CoA (BCoA), which up-regulated CPT1A activity through antagonizing the association of malonyl-CoA (MCoA), the best known metabolic intermediate inhibiting CPT1A, to promote FAO and thereby iTreg differentiation. Mutation of CPT1A at Arg243, a reported amino acid required for MCoA association, impaired both MCoA and BCoA binding, indicating that Arg243 is probably the responsible site for MCoA and BCoA association. Furthermore, blocking BCoA formation by ACSS2 inhibitor compromised butyrate-mediated iTreg generation and mitigation of mouse colitis. Together, we unveil a previously unappreciated role for butyrate in iTreg differentiation and illustrate butyrate–BCoA–CPT1A axis for the regulation of immune homeostasis.