Tumor progression locus-2 (Tpl2) kinase is a major inflammatory mediator in immune cell types recently found to be genetically associated with inflammatory bowel diseases (IBDs). Here we show that Tpl2 may exert a dominant homeostatic rather than inflammatory function in the intestine mediated specifically by subepithelial intestinal myofibroblasts (IMFs). Mice with complete or IMF-specific Tpl2 ablation are highly susceptible to epithelial injury-induced colitis showing impaired compensatory proliferation in crypts and extensive ulcerations without significant changes in inflammatory responses. Following epithelial injury, IMFs sense innate or inflammatory signals and activate, via Tpl2, the cyclooxygenase-2 (Cox-2)-prostaglandin E2 (PGE2) pathway, which we show here to be essential for the epithelial homeostatic response. Exogenous PGE2 administration rescues mice with complete or IMF-specific Tpl2 ablation from defects in crypt function and susceptibility to colitis. We also show that Tpl2 expression is decreased in IMFs isolated from the inflamed ileum of IBD patients indicating that Tpl2 function in IMFs may be highly relevant to human disease. The IMF-mediated mechanism we propose also involves the IBD-associated genes IL1R1, MAPK1, and the PGE2 receptor-encoding PTGER4. Our results establish a previously unidentified myofibroblast-specific innate pathway that regulates intestinal homeostasis and may underlie IBD susceptibility in humans.