A remarkable feature of regenerative processes is their ability to halt proliferation once an organ's structure has been restored. The Wnt signalling pathway is the major driving force for homeostatic self-renewal and regeneration in the mammalian intestine. However, the mechanisms that counterbalance Wnt-driven proliferation are poorly understood. Here we demonstrate in mice and humans that yes-associated protein 1 (YAP; also known as YAP1)--a protein known for its powerful growth-inducing and oncogenic properties--has an unexpected growth-suppressive function, restricting Wnt signals during intestinal regeneration. Transgenic expression of YAP reduces Wnt target gene expression and results in the rapid loss of intestinal crypts. In addition, loss of YAP results in Wnt hypersensitivity during regeneration, leading to hyperplasia, expansion of intestinal stem cells and niche cells, and formation of ectopic crypts and microadenomas. We find that cytoplasmic YAP restricts elevated Wnt signalling independently of the AXIN-APC-GSK-3β complex partly by limiting the activity of dishevelled (DVL). DVL signals in the nucleus of intestinal stem cells, and its forced expression leads to enhanced Wnt signalling in crypts. YAP dampens Wnt signals by restricting DVL nuclear translocation during regenerative growth. Finally, we provide evidence that YAP is silenced in a subset of highly aggressive and undifferentiated human colorectal carcinomas, and that its expression can restrict the growth of colorectal carcinoma xenografts. Collectively, our work describes a novel mechanistic paradigm for how proliferative signals are counterbalanced in regenerating tissues. Additionally, our findings have important implications for the targeting of YAP in human malignancies.