Bariatric surgery, the most effective treatment for obesity and type 2 diabetes, is associated with increased levels of the incretin hormone glucagon-like peptide-1 (GLP-1) and changes in levels of circulating bile acids. The levels of individual bile acids in the gastrointestinal (GI) tract after surgery have, however, remained largely unstudied. Using ultra-high performance liquid chromatography-mass spectrometry-based quantification, we observed an increase in an endogenous bile acid, cholic acid-7-sulfate (CA7S), in the GI tract of both mice and humans after sleeve gastrectomy. We show that CA7S is a Takeda G-protein receptor 5 (TGR5) agonist that increases Tgr5 expression and induces GLP-1 secretion. Furthermore, CA7S administration increases glucose tolerance in insulin-resistant mice in a TGR5-dependent manner. CA7S remains gut restricted, minimizing off-target effects previously observed for TGR5 agonists absorbed into the circulation. By studying changes in individual metabolites after surgery, the present study has revealed a naturally occurring TGR5 agonist that exerts systemic glucoregulatory effects while remaining confined to the gut.