The gastrointestinal epithelium is a highly organised tissue that is constantly being renewed. In order to maintain homeostasis, the balance between intestinal stem cell (ISC) self-renewal and differentiation must be carefully regulated. In this review, we describe how the intestinal stem cell niche provides a unique environment to regulate self-renewal and differentiation of ISCs. It has traditionally been believed that the mesenchymal myofibroblasts play an important role in the crosstalk between ISCs and the niche. However, recent evidence in Drosophila and in vertebrates suggests that epithelial cells also contribute to the niche. We discuss the multiple signalling pathways that are utilised to regulate stemness within the niche, including members of the Wnt, BMP and Hedgehog pathways, and how aberrations in these signals lead to disruption of the normal crypt–villus axis. Finally, we also discuss how CDX1 and inhibition of the Notch pathway are important in specifying enterocyte and goblet cell differentiation respectively.