The gut and liver communicate through the biliary tract, portal vein, and systemic circulation, but the mechanisms by which this gut-liver axis regulates intestinal physiology are not well understood. This study identifies pigment epithelium-derived factor (PEDF), a liver-derived soluble Wnt inhibitor, which restricts intestinal stem cell (ISC) hyperproliferation to maintain gut homeostasis by suppressing the Wnt/β-catenin signaling pathway. Intestinal inflammation increases microbial danger signals, which are sensed by the liver and lead to reduced PEDF production through peroxisome proliferator-activated receptor-α (PPARα). This repression liberates ISC proliferation, accelerating tissue repair. Additionally, fenofibrate, a PPARα agonist, enhances colitis susceptibility due to PEDF activity. The study demonstrates that the gut-liver axis controls ISC expansion for intestinal homeostasis through reciprocal interactions between the gut and liver, providing potential targets for therapeutic intervention in intestinal inflammation.The gut and liver communicate through the biliary tract, portal vein, and systemic circulation, but the mechanisms by which this gut-liver axis regulates intestinal physiology are not well understood. This study identifies pigment epithelium-derived factor (PEDF), a liver-derived soluble Wnt inhibitor, which restricts intestinal stem cell (ISC) hyperproliferation to maintain gut homeostasis by suppressing the Wnt/β-catenin signaling pathway. Intestinal inflammation increases microbial danger signals, which are sensed by the liver and lead to reduced PEDF production through peroxisome proliferator-activated receptor-α (PPARα). This repression liberates ISC proliferation, accelerating tissue repair. Additionally, fenofibrate, a PPARα agonist, enhances colitis susceptibility due to PEDF activity. The study demonstrates that the gut-liver axis controls ISC expansion for intestinal homeostasis through reciprocal interactions between the gut and liver, providing potential targets for therapeutic intervention in intestinal inflammation.