Intestinal inflammation is widely recognized as a pivotal player in health and disease. Defined cytologically as the infiltration of leukocytes in the lamina propria layer of the intestine, it can damage the epithelium and, on a chronic basis, induce inflammatory bowel disease and potentially cancer. The current view thus dictates that blood cell infiltration is the instigator of intestinal inflammation and tumor-promoting inflammation. This is based partially on work in humans and mice showing that intestinal damage during microbially mediated inflammation activates phagocytic cells and lymphocytes that secrete inflammatory signals promoting tissue damage and tumorigenesis. Nevertheless, extensive parallel work in the Drosophila midgut shows that intestinal epithelium damage induces inflammatory signals and growth factors acting mainly in a paracrine manner to induce intestinal stem cell proliferation and tumor formation when genetically predisposed. This is accomplished without any apparent need to involve Drosophila hemocytes. Therefore, recent work on Drosophila host defense to infection by expanding its main focus on systemic immunity signaling pathways to include the study of organ homeostasis in health and disease shapes a new notion that epithelially emanating cytokines and growth factors can directly act on the intestinal stem cell niche to promote "regenerative inflammation" and potentially cancer.