Increased levels of intestinal bile acids (BAs) are a risk factor for colorectal cancer (CRC). Here, we show that the convergence of dietary factors (high-fat diet) and dysregulated WNT signaling (APC mutation) alters BA profiles to drive malignant transformations in Lgr5-expressing (Lgr5+) cancer stem cells and promote an adenoma-to-adenocarcinoma progression. Mechanistically, we show that BAs that antagonize intestinal farnesoid X receptor (FXR) function, including tauro-β-muricholic acid (T-βMCA) and deoxycholic acid (DCA), induce proliferation and DNA damage in Lgr5+ cells. Conversely, selective activation of intestinal FXR can restrict abnormal Lgr5+ cell growth and curtail CRC progression. This unexpected role for FXR in coordinating intestinal self-renewal with BA levels implicates FXR as a potential therapeutic target for CRC.