The ability to absorb ingested nutrients is an essential function of all metazoans and utilizes a wide array of nutrient transporters found on the absorptive enterocytes of the small intestine. A unique population of patients has previously been identified with severe congenital malabsorptive diarrhea upon ingestion of any enteral nutrition. The intestines of these patients are macroscopically normal, but lack enteroendocrine cells (EECs), suggesting an essential role for this rare population of nutrient-sensing cells in regulating macronutrient absorption. Here, we use human and mouse models of EEC deficiency to identify an unappreciated role for the EEC hormone peptide YY in regulating ion-coupled absorption of glucose and dipeptides. We find that peptide YY is required in the small intestine to maintain normal electrophysiology in the presence of vasoactive intestinal polypeptide, a potent stimulator of ion secretion classically produced by enteric neurons. Administration of peptide YY to EEC-deficient mice restores normal electrophysiology, improves glucose and peptide absorption, diminishes diarrhea and rescues postnatal survival. These data suggest that peptide YY is a key regulator of macronutrient absorption in the small intestine and may be a viable therapeutic option to treat patients with electrolyte imbalance and nutrient malabsorption.