Infection with transmissible gastroenteritis virus (TGEV) has been associated with villous atrophy within 48 h, which seriously disrupts intestinal homeostasis. However, the underlying mechanisms remain elusive. In this study, we found that TGEV infection severely disrupted intestinal homeostasis via inhibition of self-renewal and differentiation in Lgr5 intestinal stem cells (ISCs). Profoundly, TGEV-encoded NSP10/NSP16 protein complex-mediated the inactivation of Notch signaling provided a mechanistic explanation for this phenomenon. Initial invasions by TGEV-targeted Paneth cells through aminopeptidase N (APN) receptor, then inducing mitochondrial damage and ROS generation in them, ultimately causing Paneth cell decrease and loss of Notch factors (DII4 and Hes5), which are essential for Lgr5 ISCs self-renewal and differentiation. Interestingly, loss of Notch signaling induced goblet cells differentiation at the cost of absorptive enterocytes and promoted mucins secretion, which accelerated TGEV replication. Therefore, the more differentiation of goblet cells, the greater TGEV infection in jejunum. These results provide a detailed mechanistic pathway by which villous atrophy sharply occurs in TGEV-infected jejunum within 48 h. Thus, the pathogenesis of TGEV can be described as a "bottom up scenario", which is contrary to the traditional "top down" hypothesis. Together, our findings provide a potential link between diarrheal virus infection and crypt cells response that regulates Paneth cells function and Lgr5 ISCs fate and could be exploited for therapeutic application.