Environmental enteric dysfunction (EED) is an inflammatory syndrome postulated to contribute to stunted child growth and to be associated with intestinal dysbiosis and nutrient malabsorption. However, the small intestinal contributions to EED remain poorly understood. This study aimed to assess changes in the proximal and distal intestinal microbiota in the context of stunting and EED and to test for a causal role of these bacterial isolates in the underlying pathophysiology. We performed a cross-sectional study in two African countries recruiting roughly 1,000 children aged 2 to 5 years and assessed the microbiota in the stomach, duodenum, and feces. Upper gastrointestinal samples were obtained from stunted children and stratified according to stunting severity. Fecal samples were collected. We then investigated the role of clinical isolates in EED pathophysiology using tissue culture and animal models. We find that small intestinal bacterial overgrowth (SIBO) is extremely common (>80%) in stunted children. SIBO is frequently characterized by an overgrowth of oral bacteria, leading to increased permeability and inflammation and to replacement of classical small intestinal strains. These duodenal bacterial isolates decrease lipid absorption in both cultured enterocytes and mice, providing a mechanism by which they may exacerbate EED and stunting. Further, we find a specific fecal signature associated with the EED markers fecal calprotectin and alpha-antitrypsin. Our study shows a causal implication of ectopic colonization of oral bacterial isolated from the small intestine in nutrient malabsorption and gut leakiness in vitro. These findings have important therapeutic implications for modulating the microbiota through microbiota-targeted interventions.