Diurnal rhythmicity in the gut maintains gut integrity, circadian rhythms, and metabolic homeostasis. However, existing studies focus on microbial composition rather than transcriptional activity. To understand microbial functional dynamics, we characterize diurnal fluctuations in the mouse cecal metatranscriptome and metagenome under high-fat diet and time-restricted feeding (TRF). We show that metatranscriptomics uncovers TRF-induced time-dependent microbial functional shifts that are undetectable with metagenomics alone. We also found bile salt hydrolase (bsh) from Dubosiella newyorkensis exhibits diurnal expression in the TRF group. Engineering this bsh, along with other candidates, into a native E. coli chassis reveals distinct differences in deconjugation and amidation activities, underscoring functional specificity. In vivo, a D. newyorkensis bsh improves insulin sensitivity, glucose tolerance, and body composition, suggesting a direct role in TRF metabolic benefits. This study highlights how coupling metatranscriptomics with engineered bacterial systems is a powerful approach for uncovering time-dependent bacterial functions related to health and disease.