The vertebrate intestine is a model for investigating inductive cellular interactions and the roles of epithelial stem cells in tissue regeneration, and for understanding parallels between development and cancer. We have used serial analysis of gene expression to measure transcript levels across stages in mouse intestine development. The data (http://genome.dfci.harvard.edu/GutSAGE) identify novel differentiation products, potential effectors of epithelial-mesenchymal interactions, and candidate markers and regulators of intestinal epithelium. Transcripts that decline significantly during intestine development frequently are absent from the adult gut. We show that a significant proportion of such genes may be reactivated in human colon cancers. As an example, hepatoma-derived growth factor (HDGF) mRNA is expressed prominently in early gut tissue, with substantially reduced levels after villous epithelial differentiation. HDGF expression is dramatically increased in human colorectal cancers, especially in tumors proficient in DNA mismatch repair, and thus represents a novel marker for a distinctive tumor subtype. HDGF overexpression in fetal intestine explants inhibits maturation, suggesting a role in epithelial differentiation. To investigate the molecular basis for HDGF functions, we isolated components of a nuclear HDGF complex, including heterogeneous nuclear ribonucleoproteins implicated in processing RNA. These genes are regulated in tandem with HDGF during intestine development and one factor, TLS/Fus, is commonly overexpressed in colon cancers. Tumor expression of fetal genes may underlie similarities between developing and malignant tissues, such as self-renewal, invasion and angiogenesis. Our findings also advance understanding of HDGF functions and implicate this developmentally regulated gene in RNA metabolic pathways that may influence malignant behaviors in colorectal cancer.