The tumour suppressor APC is the most commonly mutated gene in colorectal cancer. Loss of Apc in intestinal stem cells drives the formation of adenomas in mice via increased WNT signalling, but reduced secretion of WNT ligands increases the ability of Apc-mutant intestinal stem cells to colonize a crypt (known as fixation). Here we investigated how Apc-mutant cells gain a clonal advantage over wild-type counterparts to achieve fixation. We found that Apc-mutant cells are enriched for transcripts that encode several secreted WNT antagonists, with Notum being the most highly expressed. Conditioned medium from Apc-mutant cells suppressed the growth of wild-type organoids in a NOTUM-dependent manner. Furthermore, NOTUM-secreting Apc-mutant clones actively inhibited the proliferation of surrounding wild-type crypt cells and drove their differentiation, thereby outcompeting crypt cells from the niche. Genetic or pharmacological inhibition of NOTUM abrogated the ability of Apc-mutant cells to expand and form intestinal adenomas. We identify NOTUM as a key mediator during the early stages of mutation fixation that can be targeted to restore wild-type cell competitiveness and provide preventative strategies for people at a high risk of developing colorectal cancer.