Epithelial-mesenchymal interactions that govern the development of the colon from the primitive gastrointestinal tract are still unclear. In this study, we determine the temporal-spatial expression pattern of Fibroblast growth factor 10 (Fgf10), a key developmental gene, in the colon at different developmental stages. We found that Fgf10 is expressed in the mesenchyme of the distal colon, while its main receptor Fgfr2-IIIb is expressed throughout the entire intestinal epithelium. We demonstrate that Fgf10 inactivation leads to decreased proliferation and increased cell apoptosis in the colonic epithelium at E10.5, therefore resulting in distal colonic atresia. Using newly described Fgf10 hypomorphic mice, we show that high levels of FGF10 are dispensable for the differentiation of the colonic epithelium. Our work unravels for the first time the pivotal role of FGF10 in the survival and proliferation of the colonic epithelium, biological activities which are essential for colonic crypt formation.