Abstract Intestinal crypts are composed of heterogeneous and highly plastic cell populations. Lgr5high-stem cells (SC) are responsible for homeostatic renewal, but other cells can revert to an SC-like phenotype to maintain epithelial integrity. Despite their distinct roles in orchestrating homeostasis, both populations have been designated as the putative “cell-of-origin” of colorectal cancer. However, their respective involvement in the emergence of drug-resistant cancer SCs (CSC), responsible for tumor relapse and associated with poor outcome of colorectal cancer, remains elusive. In this context, the intestinal SC/progenitor-marker Musashi1 (MSI1) is interesting as it plays important functions in intestinal homeostasis and is frequently overexpressed in human colorectal cancer. Therefore, our aims were: (i) to study the impact of chemotherapy on Lgr5-expressing and MSI1-expressing cell populations, (ii) to explore the effect of increased MSI1 levels in response to treatment, and (iii) to evaluate the relevance in human colorectal cancer. Engineered mouse models treated with the therapeutic agent 5-fluorouracil showed that upon increased MSI1 levels, Lgr5high SCs remain sensitive while Lgr5low progenitors reprogram to a drug-resistant phenotype. This resulted in the expansion of an MSI1-expressing cell subpopulation with improved resistance to DNA damage and increased detoxification, typical properties of dormant-CSCs that can reactivate after chemotherapy. Analysis in patients with colorectal cancer revealed a correlation between MSI1 levels and tumor grading, CSC phenotype, and chemoresistance. Altogether, these results shed new light on the biology and plasticity of normal crypt and cancer cell populations and also open new perspectives to target MSI1 to improve chemotherapy outcome. Significance: This study unveils paradoxical roles for MSI1, underlining its importance in facilitating intestinal regeneration upon injury but also unraveling its new function in drug-resistant colorectal cancer stem cells.