Wnt signalling, which is transduced through beta-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.