Homeostasis at mucosal surfaces requires cross-talk between the environment and barrier epithelial cells. Disruption of barrier function typifies mucosal disease. Here we elucidate a bifunctional role in coordinating this cross-talk for the inflammatory bowel disease risk-gene INAVA. Both activities require INAVA’s DUF3338 domain (renamed CUPID). CUPID stably binds the cytohesin ARF-GEF ARNO to effect lateral membrane F-actin assembly underlying cell-cell junctions and barrier function. Unexpectedly, when bound to CUPID, ARNO affects F-actin dynamics in the absence of its canonical activity as a guanine nucleotide-exchange factor. Upon exposure to IL-1β, INAVA relocates to form cytosolic puncta, where CUPID amplifies TRAF6-dependent polyubiquitination and inflammatory signaling. In this case, ARNO binding to CUPID negatively-regulates polyubiquitination and the inflammatory response. INAVA and ARNO act similarly in primary human macrophages responding to IL-1β and to NOD2 agonists. Thus, INAVA-CUPID exhibits dual functions, coordinated directly by ARNO, that bridge epithelial barrier function with extracellular signals and inflammation.