In the prevailing model, Lgr5+ cells are the only intestinal stem cells (ISCs) that sustain homeostatic epithelial regeneration by upward migration of progeny through elusive upper crypt transit-amplifying (TA) intermediates. Here, we identify a proliferative upper crypt population marked by Fgfbp1, in the location of putative TA cells, that is transcriptionally distinct from Lgr5+ cells. Using a kinetic reporter for time-resolved fate mapping and Fgfbp1-CreER(T2) lineage tracing, we establish that Fgfbp1+ cells are multi-potent and give rise to Lgr5+ cells, consistent with their ISC function. Fgfbp1+ cells also sustain epithelial regeneration following Lgr5+ cell depletion. We demonstrate that FGFBP1, produced by the upper crypt cells, is an essential factor for crypt proliferation and epithelial homeostasis. Our findings support a model in which tissue regeneration originates from upper crypt Fgfbp1+ cells that generate progeny propagating bi-directionally along the crypt-villus axis and serve as a source of Lgr5+ cells in the crypt base.