We have investigated the gross, microscopic and molecular effects of carnitine deficiency in the neonatal gut using a mouse model with a loss-of-function mutation in the OCTN2 (SLC22A5) carnitine transporter. The tissue carnitine content of neonatal homozygous (OCTN2(-/-)) mouse small intestine was markedly reduced; the intestine displayed signs of stunted villous growth, early signs of inflammation, lymphocytic and macrophage infiltration and villous structure breakdown. Mitochondrial β-oxidation was active throughout the GI tract in wild type newborn mice as seen by expression of 6 key enzymes involved in β-oxidation of fatty acids and genes for these 6 enzymes were up-regulated in OCTN2(-/-) mice. There was increased apoptosis in gut samples from OCTN2(-/-) mice. OCTN2(-/-) mice developed a severe immune phenotype, where the thymus, spleen and lymph nodes became atrophied secondary to increased apoptosis. Carnitine deficiency led to increased expression of CD45-B220(+) lymphocytes with increased production of basal and anti-CD3-stimulated pro-inflammatory cytokines in immune cells. Real-time PCR array analysis in OCTN2(-/-) mouse gut epithelium demonstrated down-regulation of TGF-β/BMP pathway genes. We conclude that carnitine plays a major role in neonatal OCTN2(-/-) mouse gut development and differentiation, and that severe carnitine deficiency leads to increased apoptosis of enterocytes, villous atrophy, inflammation and gut injury.