Cell state plasticity is carefully regulated in adult epithelia to prevent cancer. The aberrant expansion of the normally restricted capability for cell state plasticity in neoplasia is poorly defined. Using genetically engineered and carcinogen-induced mouse models of intestinal neoplasia, we observed that impaired differentiation is a conserved event preceding cancer development. Single-cell RNA sequencing (scRNA-seq) of premalignant lesions from mouse models and a patient with hereditary polyposis revealed that cancer initiates by adopting an aberrant transcriptional state characterized by regenerative activity, marked by Ly6a (Sca-1), and reactivation of fetal intestinal genes, including Tacstd2 (Trop2). Genetic inactivation of Sox9 prevented adenoma formation, obstructed the emergence of regenerative and fetal programs, and restored multilineage differentiation by scRNA-seq. Expanded chromatin accessibility at regeneration and fetal genes upon Apc inactivation was reduced by concomitant Sox9 suppression. These studies indicate that aberrant cell state plasticity mediated by unabated regenerative activity and developmental reprogramming precedes cancer development.