Wnt/β-catenin signaling controls intestinal stem cell (ISC) proliferation, and is aberrantly activated in colorectal cancer. Inhibitors of the ADP-ribose polymerase Tankyrase (Tnks) have become lead therapeutic candidates for Wnt-driven cancers, following the recent discovery that Tnks targets Axin, a negative regulator of Wnt signaling, for proteolysis. Initial reports indicated that Tnks is important for Wnt pathway activation in cultured human cell lines. However, the requirement for Tnks in physiological settings has been less clear, as subsequent studies in mice, fish and flies suggested that Tnks was either entirely dispensable for Wntdependent processes in vivo, or alternatively, had tissue-specific roles. Here, using null alleles, we demonstrate that the regulation of Axin by the highly conserved Drosophila Tnks homolog is essential for the control of ISC proliferation. Furthermore, in the adult intestine, where activity of the Wingless pathway is graded and peaks at each compartmental boundary, Tnks is dispensable for signaling in regions where pathway activity is high, but essential where pathway activity is relatively low. Finally, as observed previously for Wingless pathway components, Tnks activity in absorptive enterocytes controls the proliferation of neighboring ISCs non-autonomously by regulating JAK/STAT signaling. These findings reveal the requirement for Tnks in the control of ISC proliferation and suggest an essential role in the amplification of Wnt signaling, with relevance for development, homeostasis and cancer.