Metastasis-initiating cells with stem-like properties drive cancer lethality, yet their origins and relationship to primary-tumor-initiating stem cells are not known. We show that L1CAM cells in human colorectal cancer (CRC) have metastasis-initiating capacity, and we define their relationship to tissue regeneration. L1CAM is not expressed in the homeostatic intestinal epithelium, but is induced and required for epithelial regeneration following colitis and in CRC organoid growth. By using human tissues and mouse models, we show that L1CAM is dispensable for adenoma initiation but required for orthotopic carcinoma propagation, liver metastatic colonization and chemoresistance. L1CAM cells partially overlap with LGR5 stem-like cells in human CRC organoids. Disruption of intercellular epithelial contacts causes E-cadherin-REST transcriptional derepression of L1CAM, switching chemoresistant CRC progenitors from an L1CAM to an L1CAM state. Thus, L1CAM dependency emerges in regenerative intestinal cells when epithelial integrity is lost, a phenotype of wound healing deployed in metastasis-initiating cells.