Intestinal epithelial cell (IEC) shedding is a fundamental response to intestinal damage, yet underlying mechanisms and functions have been difficult to define. Here we model chronic intestinal damage in zebrafish larvae using the nonsteroidal antiinflammatory drug (NSAID) Glafenine. Glafenine induced the unfolded protein response (UPR) and inflammatory pathways in IECs, leading to delamination. Glafenine-induced inflammation was augmented by microbial colonization and associated with changes in intestinal and environmental microbiotas. IEC shedding was a UPR-dependent protective response to Glafenine that restricts inflammation and promotes animal survival. Other NSAIDs did not induce IEC delamination; however, Glafenine also displays off-target inhibition of multidrug resistance (MDR) efflux pumps. We found a subset of MDR inhibitors also induced IEC delamination, implicating MDR efflux pumps as cellular targets underlying Glafenine-induced enteropathy. These results implicate IEC delamination as a protective UPR-mediated response to chemical injury, and uncover an essential role for MDR efflux pumps in intestinal homeostasis.