Metazoans establish mutually beneficial interactions with their resident microorganisms. However, our understanding of the microbial cues contributing to host physiology remains elusive. Previously, we identified a bacterial machinery encoded by thedltoperon involved inDrosophila melanogaster’s juvenile growth promotion byLactiplantibacillus plantarum. Here, using crystallography combined with biochemical and cellular approaches, we investigate the physiological role of an uncharacterized protein (DltE) encoded by this operon. We show that lipoteichoic acids (LTAs) but not wall teichoic acids are D-alanylated inLactiplantibacillus plantarumNC8cell envelope and demonstrate that DltE is a D-Ala carboxyesterase removing D-Ala from LTA. Using the mutualistic association ofL. plantarumNC8andDrosophila melanogasteras a symbiosis model, we establish that D-alanylated LTAs (D-Ala-LTAs) are direct cues supporting intestinal peptidase expression and juvenile growth inDrosophila. Our results pave the way to probing the contribution of D-Ala-LTAs to host physiology in other symbiotic models.