The microbial environment influence animal physiology. However, the underlying molecular mechanisms of such functional interactions are largely undefined. Previously, we showed that upon chronic undernutrition, strains of Lactobacillus plantarum, a dominant commensal partner of Drosophila, promote host juvenile growth and maturation partly via enhanced expression of intestinal peptidases. By screening a transposon insertion library of Lactobacillus plantarum in gnotobiotic Drosophila larvae, we identify a bacterial cell wall modifying machinery encoded by the pbpX2-dltXABCD operon that is critical to enhance host digestive capabilities and promote growth and maturation. Deletion of this operon leads to bacterial cell wall alteration with a complete loss of teichoic acids D-alanylation. We thus conclude that teichoic acids modifications participate in commensal-host interactions and specifically, D-alanine esterification of teichoic acids contributes to optimal L. plantarum mediated intestinal peptidase expression and Drosophila juvenile growth upon chronic undernutrition.