Vancomycin-resistant Enterococcus (VRE) are highly antibiotic-resistant and readily transmissible pathogens that cause severe infections in hospitalized patients. We discovered that lithocholic acid (LCA), a secondary bile acid prevalent in the cecum and colon of mice and humans, impairs separation of growing VRE diplococci, causing the formation of long chains and increased biofilm formation. Divalent cations reversed this LCA-induced switch to chaining and biofilm formation. Experimental evolution in the presence of LCA yielded mutations in the essential two-component kinase yycG/walK and three-component response regulator liaR that locked VRE in diplococcal mode, impaired biofilm formation, and increased susceptibility to the antibiotic daptomycin. These mutant VRE strains were deficient in host colonization because of their inability to compete with intestinal microbiota. This morphotype switch presents a potential non-bactericidal therapeutic target that may help clear VRE from the intestines of dominated patients, as occurs frequently during hematopoietic stem cell transplantation.