Prolonged ingestion of a cholesterol- or saturated fatty acid-enriched diet induces chronic, often systemic, auto-inflammatory responses resulting in significant health problems worldwide. In vivo information regarding the local and direct inflammatory effect of these dietary components in the intestine and, in particular, on the intestinal epithelium is lacking. Here we report that both mice and zebrafish exposed to high-fat (HFDs) or high-cholesterol (HCDs) diets develop acute innate inflammatory responses within hours, reflected in the localized interleukin-1β-dependent accumulation of myeloid cells in the intestine. Acute HCD-induced intestinal inflammation is dependent on cholesterol uptake via Niemann-Pick C1-like 1 and inflammasome activation involving apoptosis-associated Speck-like protein containing a caspase recruitment domain, which leads to Caspase-1 activity in intestinal epithelial cells. Extended exposure to HCD results in localized, inflammation-dependent, functional dysregulation as well as systemic pathologies. Our model suggests that dietary cholesterol initiates intestinal inflammation in epithelial cells.