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Recent data establish a logarithmic expansion of leucine rich repeat containing G protein coupled receptor 5–positive (Lgr5+) colonic epithelial stem cells (CESCs) in human colorectal cancer (CRC). Complementary studies using the murine 2-stage azoxymethane–dextran sulfate sodium (AOM-DSS) colitis-associated tumor model indicate early acquisition of Wnt pathway mutations drives CESC expansion during adenoma progression. Here, subdivision of the AOM-DSS model into in vivo and in vitro stages revealed DSS induced physical separation of CESCs from stem cell niche cells and basal lamina, a source of Wnt signals, within hours, disabling the stem cell program. While AOM delivery in vivo under non-adenoma-forming conditions yielded phenotypically normal mucosa and organoids derived thereof, niche injury ex vivo by progressive DSS dose escalation facilitated outgrowth of Wnt-independent dysplastic organoids. These organoids contained 10-fold increased Lgr5+ CESCs with gain-of-function Wnt mutations orthologous to human CRC driver mutations. We posit CRC originates by niche injury–induced outgrowth of normally suppressed mutated stem cells, consistent with models of adaptive oncogenesis.