Little is known about how pro-obesity diets regulate tissue stem and progenitor cell function. Here we show that high-fat diet (HFD)-induced obesity augments the numbers and function of Lgr5(+) intestinal stem cells of the mammalian intestine. Mechanistically, a HFD induces a robust peroxisome proliferator-activated receptor delta (PPAR-δ) signature in intestinal stem cells and progenitor cells (non-intestinal stem cells), and pharmacological activation of PPAR-δ recapitulates the effects of a HFD on these cells. Like a HFD, ex vivo treatment of intestinal organoid cultures with fatty acid constituents of the HFD enhances the self-renewal potential of these organoid bodies in a PPAR-δ-dependent manner. Notably, HFD- and agonist-activated PPAR-δ signalling endow organoid-initiating capacity to progenitors, and enforced PPAR-δ signalling permits these progenitors to form in vivo tumours after loss of the tumour suppressor Apc. These findings highlight how diet-modulated PPAR-δ activation alters not only the function of intestinal stem and progenitor cells, but also their capacity to initiate tumours.