Colorectal cancer (CRC) is one of the top three cancer-related causes of death worldwide. FBXW7 is a known tumor-suppressor gene, commonly mutated in CRC and in a variety of other epithelial tumors. Low expression of FBXW7 is also associated with poor prognosis. Loss of FBXW7 sensitizes cancer cells to certain drugs, while making them more resistant to other types of chemotherapies. However, is not fully understood how epithelial cells within normal gut and primary tumors respond to potential cancer therapeutics. We have studied genetically engineered mice in which the fbxw7 gene is conditionally knocked-out in the intestine (fbxw7(∆G)). To further investigate the mechanism of Fbxw7-action, we grew intestinal crypts from floxed-fbxw7 (fbxw7(fl/fl)) and fbxw7(ΔG) mice, in a Matrigel-based organoid (mini-gut) culture. The fbxw7(ΔG) organoids exhibited rapid budding events in the crypt region. Furthermore, to test organoids for drug response, we exposed day 3 intestinal organoids from fbxw7(fl/fl) and fbxw7(∆G) mice, to various concentrations of 5-fluorouracil (5-FU) for 72 hours. 5-FU triggers phenotypic differences in organoids including changing shape, survival, resistance, and death. 5-FU however, rescues the drug-resistance phenotype of fbxw7(ΔG) through the induction of terminal differentiation. Our results support the hypothesis that a differentiating therapy successfully targets FBXW7-mutated CRC cells.