Precise regulation of cellular proliferation, differentiation, and senescence results in the continuous renewal of the intestinal epithelium with maintenance of a highly ordered tissue architecture. Here we show that an intestine-specific homeobox gene, Cdx2, is a transcription factor that regulates both proliferation and differentiation in intestinal epithelial cells. Conditional expression of Cdx2 in IEC-6 cells, an undifferentiated intestinal cell line, led to arrest of proliferation for several days followed by a period of growth resulting in multicellular structures containing a well-formed columnar layer of cells. The columnar cells had multiple morphological characteristics of intestinal epithelial cells. Enterocyte-like cells were polarized with tight junctions, lateral membrane interdigitations, and well-organized microvilli with associated glycocalyx located at the apical pole. Remarkably, there were also cells with a goblet cell-like ultrastructure, suggesting that two of the four intestinal epithelial cell lineages may arise from IEC-6 cells. Molecular evidence for differentiation was shown by demonstrating that cells expressing high levels of Cdx2 expressed sucrase-isomaltase, an enterocyte-specific gene which is a well-defined target for the Cdx2 protein. Taken together, our data suggest that Cdx2 may play a role in directing early processes in intestinal cell morphogenesis and in the maintenance of the differentiated phenotype by supporting transcription of differentiated gene products. We propose that Cdx2 is part of a regulatory network that orchestrates a developmental program of proliferation, morphogenesis, and gene expression in the intestinal epithelium.