Aim Dietary intervention using probiotic bacteria has emerged as a promising preventive strategy in addressing foodborne infections or gastrointestinal disorders. This study investigated the immunomodulatory effects of Lactobacillus fermentum (MTCC‐5898) on Escherichia coli‐induced inflammatory responses in intestinal epithelial cells. Methods and Results The immune response of intestinal cells (Caco‐2) in the presence of probiotic Lact. fermentum was determined during exclusion, competition and displacement of E. coli as the inflammatory agent. To achieve this objective, transcriptional modulation of key immune‐related genes (cytokines, pattern recognition receptors and NF‐κB), release of cytokines and nuclear translocation of the NF‐κB subunit p‐65 were studied. Expression of pro‐inflammatory cytokines IL‐8, TNF‐α, IFN‐ϒ and IL‐23 was high in E. coli‐exposed intestinal cells. However, overexpression of these E. coli‐induced pro‐inflammatory cytokines was prevented by Lact. fermentum during exclusion and competition assays. It also modulated the transcriptional expression of regulatory cytokines (IL‐10 and TGF‐β), pattern recognition receptors (TLR‐2 and TLR‐4) and genes associated with master inflammatory regulators (NF‐κB and SIGIRR) to reduce E. coli‐induced inflammation. The protective effect of Lact. fermentum was further confirmed by suppression of nuclear translocation of cytoplasmic NF‐κB subunit (p‐65). Conclusion Lactobacillus fermentum alleviated E. coli‐induced inflammatory responses by modulating the NF‐κB signalling besides pro‐inflammatory and regulatory cytokines expression. Significance and Impact of the Study Lactobacillus fermentum holds significant promise as a potent nutraceutical that prevents and manages inflammatory gut‐associated dysfunctions.