The intestinal epithelium undergoes a continual process of proliferation, differentiation and apoptosis. Previously, we have shown that the PI3K/Akt/mTOR pathway has a critical role in intestinal homeostasis. However, the downstream targets mediating the effects of mTOR in intestinal cells are not known. Here, we show that the ketone body β-hydroxybutyrate (βHB), an endogenous inhibitor of histone deacetylases (HDACs) induces intestinal cell differentiation as noted by the increased expression of differentiation markers (Mucin2 (MUC2), lysozyme, IAP, sucrase-isomaltase, KRT20, villin, Caudal-related homeobox transcription factor 2 (CDX2) and p21Waf1). Conversely, knockdown of the ketogenic mitochondrial enzyme hydroxymethylglutaryl CoA synthase 2 (HMGCS2) attenuated spontaneous differentiation in the human colon cancer cell line Caco-2. Overexpression of HMGCS2, which we found is localized specifically in the more differentiated portions of the intestinal mucosa, increased the expression of CDX2, thus further suggesting the contributory role of HMGCS2 in intestinal differentiation. In addition, mice fed a ketogenic diet demonstrated increased differentiation of intestinal cells as noted by an increase in the enterocyte, goblet and Paneth cell lineages. Moreover, we showed that either knockdown of mTOR or inhibition of mTORC1 with rapamycin increases the expression of HMGCS2 in intestinal cells in vitro and in vivo, suggesting a possible cross-talk between mTOR and HMGCS2/βHB signaling in intestinal cells. In contrast, treatment of intestinal cells with βHB or feeding mice with a ketogenic diet inhibits mTOR signaling in intestinal cells. Together, we provide evidence showing that HMGCS2/βHB contributes to intestinal cell differentiation. Our results suggest that mTOR acts cooperatively with HMGCS2/βHB to maintain intestinal homeostasis.