Obesity promotes the development of insulin resistance and increases the incidence of colitis-associated cancer (CAC), but whether a blunted insulin action specifically in intestinal epithelial cells (IECs) affects CAC is unknown. Here, we show that obesity impairs insulin sensitivity in IECs and that mice with IEC-specific inactivation of the insulin and IGF1 receptors exhibit enhanced CAC development as a consequence of impaired restoration of gut barrier function. Blunted insulin signalling retains the transcription factor FOXO1 in the nucleus to inhibit expression of Dsc3, thereby impairing desmosome formation and epithelial integrity. Both IEC-specific nuclear FoxO1ADA expression and IEC-specific Dsc3 inactivation recapitulate the impaired intestinal integrity and increased CAC burden. Spontaneous colonic tumour formation and compromised intestinal integrity are also observed upon IEC-specific coexpression of FoxO1ADA and a stable Myc variant, thus suggesting a molecular mechanism through which impaired insulin action and nuclear FOXO1 in IECs promotes CAC.