Conditional deletion of β1 integrins in the intestinal epithelium, unlike in epidermal and mammary epithelia, of mice does not result in decreased cell adhesion and proliferation, but instead causes a profound increase in epithelial proliferation with dysplasia and polypoid structures. The increased epithelial proliferation inhibited epithelial differentiation that caused severe malnutrition and early postnatal lethality. The striking similarities between β1 integrin-deleted mice and neonatal mice with defective Hedgehog signaling led to the discovery that Hedgehog expression was markedly reduced in the former mice. β1 integrins were found to drive the expression of Hedgehogs in intestinal epithelial cells in an HNF-3β (Foxa2)-dependent fashion. The expression of Tcf-4, a transcription factor known to be required for intestinal epithelial stem cell proliferation, was increased and mislocalized in the intestinal epithelia of the β1 integrin-deleted mice and in newborn mice treated with the Hedgehog signaling inhibitor cyclopamine. This study shows that β1 integrins are key regulators of proliferation and homeostasis in the intestine and achieve this not through anchorage-dependent effects but by generating Hh expression and signaling.