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Signaling initiated by secreted glycoproteins of the Wnt family regulates many aspects of embryonic development and it is involved in homeostasis of adult tissues. In the gastrointestinal (GI) tract the Wnt pathway maintains the self-renewal capacity of epithelial stem cells. The stem cell attributes are conferred by mutual interactions of the stem cell with its local microenvironment, the stem cell niche. The niche ensures that the threshold of Wnt signaling in the stem cell is kept in physiological range. In addition, the Wnt pathway involves various feedback loops that balance the opposing processes of cell proliferation and differentiation. Today, we have compelling evidence that mutations causing aberrant activation of the Wnt pathway promote expansion of undifferentiated progenitors and lead to cancer. The review summarizes recent advances in characterization of adult epithelial stem cells in the gut. We mainly focus on discoveries related to molecular mechanisms regulating the output of the Wnt pathway. Moreover, we present novel experimental approaches utilized to investigate the epithelial cell signaling circuitry in vivo and in vitro. Pivotal aspects of tissue homeostasis are often deduced from studies of tumor cells; therefore, we also discuss some latest results gleaned from the deep genome sequencing studies of human carcinomas of the colon and rectum.