Congenital tufting enteropathy (CTE) is an autosomal recessive disease of infancy that causes severe intestinal failure with electrolyte imbalances and impaired growth. CTE is typically diagnosed by its characteristic histological features, including villous atrophy, crypt hyperplasia and focal epithelial tufts consisting of densely packed enterocytes. Mutations in the EPCAM and SPINT2 genes have been identified as the etiology for this disease. The significant morbidity and mortality and lack of direct treatments for CTE patients demand a better understanding of disease pathophysiology. Here, the latest knowledge of CTE biology is systematically reviewed, including clinical aspects, disease genetics, and research model systems. Particular focus is paid to the pathogenesis of CTE and predicted mechanisms of the disease as these would provide insight for future therapeutic options. The contribution of intestinal homeostasis, including the role of intestinal cell differentiation, defective enterocytes, disrupted barrier and cell–cell junction, and cell-matrix adhesion, is vividly described here (see Graphical Abstract). Moreover, based on the known dynamics of EpCAM signaling, potential mechanistic pathways are highlighted that may contribute to the pathogenesis of CTE due to either loss of EpCAM function or EpCAM mutation. Although not fully elucidated, these pathways provide an improved understanding of this devastating disease.