The Notch-regulated transcription factor mouse atonal homolog 1 (Math1) is required for the development of intestinal secretory cells, as demonstrated by the loss of goblet, endocrine and Paneth cell types in null mice. However, it was unknown whether Math1 is sufficient to induce the program of secretory cell differentiation. To examine the function of Math1 in the differentiation of intestinal epithelial cells, intestinal morphology and epithelial and mesenchymal cell fate were examined by histological staining and marker gene expression in transgenic mice expressing a villin-regulated Math1 transgene. Late prenatal transgenic founders exhibited a gross cellular transformation into a secretory epithelium. The expansion of secretory cells coupled with the almost complete loss of absorptive enterocytes suggested reprogramming of a bipotential progenitor cell. Moreover, Math1 expression inhibited epithelial cell proliferation, as demonstrated by a marked reduction in Ki67 positive cells and blunted villi. Unexpectedly, the transgenic mesenchyme was greatly expanded with increased proliferation. Several mesenchymal cell types were amplified, including smooth muscle and neurons, with maintenance of basic radial patterning. Since transgenic Math1 expression was restricted to the epithelium, these findings suggest that epithelial-mesenchymal signaling is altered by the cellular changes induced by Math1. Thus, Math1 is a key effector directing multipotential precursors to adopt secretory and not absorptive cell fate.