The lining of the small intestine is a single layer of epithelial cells divided into two regions. The upper region consists of finger-like projections called villi, and the lower region contains proliferative crypts. The bottom of the crypt contains undifferentiated intestinal stem cells or ISCs distributed between the differentiated Paneth cells. Lgr5 receptor expression distinguishes these ISCs from the surrounding cells. Paneth cells produce localized Wnt signals that play an essential role in the maintenance and proliferation of ISCs. The other surrounding niche cells release R-spondin. R-spondin binds to the Lgr5 receptor and enhances the intracellular Wnt signaling. The pathways triggered by Wnt ligands and R-spondin lead to the division of ISCs and upward migration of the daughter cells. The daughter cells then divide further and start differentiating into transit-amplifying or TA cells. TA cells then terminally differentiate into four cell types. The absorptive, goblet, and enteroendocrine cells move to the villus, and the Paneth cells migrate to the crypt.