Paneth cells (PCs), responsible for the secretion of antimicrobial peptides in the small intestine and for niche support to Lgr5+ crypt-base columnar stem cells (CBCs), have been shown to respond to inflammation by dedifferentiating into stem-like cells in order to sustain a regenerative response1,2. Therefore, PCs may represent the cells-of-origin of intestinal cancer in the context of inflammation. To test this hypothesis, we targeted Apc, Kras, and Tp53 mutations in Paneth cells by Cre-Lox technology and modelled inflammation by dextran sodium sulfate (DSS) administration. PC-specific loss of Apc resulted in multiple small intestinal tumors, whereas Kras or Tp53 mutations did not. Compound Apc and Kras mutations in PCs resulted in a striking increase in tumor multiplicity even in the absence of the inflammatory insult. By combining scRNAseq with lineage tracing to capture the conversion of PCs into bona fide tumor cells, we show that they progress through a "revival stem cell" (RSC) state characterized by high Clusterin (Clu) expression and Yap1 signaling, reminiscent of what has been previously observed upon irradiation of the mouse digestive tract3. Accordingly, comparison of PC- and Lgr5-derived murine intestinal tumors revealed differences related to Wnt signaling and inflammatory pathways which match the dichotomy of CBCs and injury-induced RSCs4 between human sporadic colon cancers and those arising in the context of inflammatory bowel diseases. Last, we show that western-style dietary habits, known to trigger a low-grade inflammation throughout the intestinal tract, underlie the analogous dedifferentiation of Paneth cells and their acquisition of stem-like features. Taken together, our results show that intestinal cancer arises in the context of inflammation through the dedifferentiation of committed secretory lineages such as Paneth cells and the activation of the revival stem cell state. As such, a true quiescent stem cell identity may be hidden in fully committed and postmitotic lineages which, upon inflammation, support the regenerative response by re-entering the cell cycle and dedifferentiating into RSCs. The chronic nature of the tissue insult in inflammatory bowel diseases and even in the context of western-style dietary habits is likely to result in the expansion of cell targets for tumor initiation and progression.