Chlorella vulgaris (C. vulgaris) is unicellular green algae consumed worldwide as a functional food. The immune stimulatory function of C. vulgaris is known; however, no study has elucidated its immune regulatory potential and associated microbiome modulation. In the current study, we aimed to validate the immune regulatory role of C. vulgaris mediated through two mechanisms. Initially, we assessed its ability to promote the expansion of the regulatory T cell (Treg) population. Subsequently, we investigated its impact on gut microbiota composition and associated metabolites. The supplementation of C. vulgaris altered the gut microbiota composition, accompanied by increased short-chain fatty acid (SCFAs) production in mice at homeostasis. We later used C. vulgaris in the treatment of a DSS-induced colitis model. C. vulgaris intervention alleviated the pathological symptom of colitis in mice, with a corresponding increase in Treg levels. As C. vulgaris is a safe and widely used food supplement, it can be a feasible strategy to instigate cross-talk between the host immune system and the intestinal flora for the effective management of inflammatory bowel disease (IBD).