The intestinal stem cell niche provides cues that actively maintain gut homeostasis. Dysregulation of these cues may compromise intestinal regeneration upon tissue insult and/or promote tumor growth. Here, we identify secreted phospholipases A2 (sPLA2s) as stem cell niche factors with context-dependent functions in the digestive tract. We show that group IIA sPLA2, a known genetic modifier of mouse intestinal tumorigenesis, is expressed by Paneth cells in the small intestine, while group X sPLA2 is expressed by Paneth/goblet-like cells in the colon. During homeostasis, group IIA/X sPLA2s inhibit Wnt signaling through intracellular activation of Yap1. However, upon inflammation they are secreted into the intestinal lumen, where they promote prostaglandin synthesis and Wnt signaling. Genetic ablation of both sPLA2s improves recovery from inflammation but increases colon cancer susceptibility due to release of their homeostatic Wnt-inhibitory role. This “trade-off” effect suggests sPLA2s have important functions as genetic modifiers of inflammation and colon cancer.