The human body is a superorganism that harbors trillions of microbes, most of which inhabit the gut. To colonize our bodies, these microbes have evolved strategies to regulate the immune system and maintain intestinal immune homeostasis by secreting chemical mediators. There is much interest in deciphering these chemicals and furthering their development as novel therapeutics. In this work, we present a combined experimental and computational approach to identifying functional immunomodulatory molecules from the gut microbiome. Based on this approach, we report the discovery of lactomodulin, a unique peptide from that exhibits dual anti-inflammatory and antibiotic activities and minimal cytotoxicity in human cell lines. Lactomodulin reduces several secreted proinflammatory cytokines, including IL-8, IL-6, IL-1β, and TNF-α. As an antibiotic, lactomodulin is effective against a range of human pathogens, and is most potent against antibiotic-resistant strains such as methicillin-resistant (MRSA) and vancomycin-resistant (VRE). The multifunctional activity of lactomodulin affirms that the microbiome encodes evolved functional molecules with promising therapeutic potential.