The Drosophila trachea, as the functional equivalent of mammalian blood vessels, senses hypoxia and oxygenates the body. Here, we show that the adult intestinal tracheae are dynamic and respond to enteric infection, oxidative agents and tumours with increased terminal branching. Increased tracheation is necessary for efficient damage-induced intestinal stem cell (ISC)-mediated regeneration and is sufficient to drive ISC proliferation in undamaged intestines. Gut damage or tumours induce HIF-1α (Sima in Drosophila), which stimulates tracheole branching via the FGF (Branchless (Bnl))-FGFR (Breathless (Btl)) signalling cascade. Bnl-Btl signalling is required in the intestinal epithelium and the trachea for efficient damage-induced tracheal remodelling and ISC proliferation. Chemical or Pseudomonas-generated reactive oxygen species directly affect the trachea and are necessary for branching and intestinal regeneration. Similarly, tracheole branching and the resulting increase in oxygenation are essential for intestinal tumour growth. We have identified a mechanism of tracheal-intestinal tissue communication, whereby damage and tumours induce neo-tracheogenesis in Drosophila, a process reminiscent of cancer-induced neoangiogenesis in mammals.