BMP/SMAD signaling is a crucial regulator of intestinal differentiation1-4. However, the molecular underpinnings of the BMP pathway in this context are unknown. Here, we characterize the mechanism by which BMP/SMAD signaling drives enterocyte differentiation. We establish that the transcription factor HNF4A acts redundantly with an intestine-restricted HNF4 paralog, HNF4G, to activate enhancer chromatin and upregulate the majority of transcripts enriched in the differentiated epithelium; cells fail to differentiate on double knockout of both HNF4 paralogs. Furthermore, we show that SMAD4 and HNF4 function via a reinforcing feed-forward loop, activating each other's expression and co-binding to regulatory elements of differentiation genes. This feed-forward regulatory module promotes and stabilizes enterocyte cell identity; disruption of the HNF4-SMAD4 module results in loss of enterocyte fate in favor of progenitor and secretory cell lineages. This intersection of signaling and transcriptional control provides a framework to understand regenerative tissue homeostasis, particularly in tissues with inherent cellular plasticity5.