Meta-analyses suggest that yogurt consumption reduces type 2 diabetes incidence in humans, but the molecular basis of these observations remains unknown. Here we show that dietary yogurt intake preserves whole-body glucose homeostasis and prevents hepatic insulin resistance and liver steatosis in a dietary mouse model of obesity-linked type 2 diabetes. Fecal microbiota transplantation studies reveal that these effects are partly linked to the gut microbiota. We further show that yogurt intake impacts the hepatic metabolome, notably maintaining the levels of branched chain hydroxy acids (BCHA) which correlate with improved metabolic parameters. These metabolites are generated upon milk fermentation and concentrated in yogurt. Remarkably, diet-induced obesity reduces plasma and tissue BCHA levels, and this is partly prevented by dietary yogurt intake. We further show that BCHA improve insulin action on glucose metabolism in liver and muscle cells, identifying BCHA as cell-autonomous metabolic regulators and potential mediators of yogurt's health effects.