Wnt signalling, which is transduced through β-catenin/TCF4, maintains the undifferentiated state of intestinal crypt progenitor cells^,. Mutational activation of the pathway initiates the adenomacarcinoma sequence^,. Whereas all other differentiated epithelial cells migrate from the crypt onto the villus, Paneth cells home towards the source of Wnt signals — that is, the crypt bottom. Here, we show that expression of a Paneth gene programme is critically dependent on TCF4 in embryonic intestine. Moreover, conditional deletion of the Wnt receptor Frizzled-5 abrogates expression of these genes in Paneth cells in the adult intestine. Conversely, adenomas in Apc-mutant mice and colorectal cancers in humans inappropriately express these Paneth-cell genes. These observations imply that Wnt signals in the crypt can separately drive a stem-cell/progenitor gene programme and a Paneth-cell maturation programme. In intestinal cancer, both gene programmes are activated simultaneously.