Positive and negative regulators of innate immunity work together to maintain immune homeostasis. We previously discovered that HLH-30/TFEB is a critical transcription factor that positively regulates host defense genes upon S. aureus infection in C. elegans. However, repression of host defense genes and negative regulation of immunity remain poorly understood. In this study, we identified nhr-42 as a negative regulator of host defense genes functioning downstream of HLH-30/TFEB, with major implications in host survival and metabolism after infection. nhr-42 expression is induced in an HLH-30/TFEB dependent manner mostly in the pharynx upon infection. We find that animals lacking nhr-42 have higher expression of host defense genes, which enables enhanced survival after infection. Antimicrobials expressed in the pharynx such as abf-2, function downstream of nhr-42 to confer resistance to infection by mitigating pathogen burden. Furthermore, nhr-42 deficient animals are defective in lipid mobilization, having higher lipid stores compared to wild type animals after infection. nhr-42 therefore enables C. elegans to limit the host defense response and reallocate energy resources through lipid mobilization after infection. To our knowledge, this is the first report of a transcription factor that represses host defense genes in C. elegans.