LGR5⁺ stem cells reside at crypt bottoms, intermingled with Paneth cells that provide Wnt, Notch and epidermal growth factor signals. Here we find that the related RNF43 and ZNRF3 transmembrane E3 ubiquitin ligases are uniquely expressed in LGR5⁺ stem cells. Simultaneous deletion of the two genes encoding these proteins in the intestinal epithelium of mice induces rapidly growing adenomas containing high numbers of Paneth and LGR5⁺ stem cells. In vitro, growth of organoids derived from these adenomas is arrested when Wnt secretion is inhibited, indicating a dependence of the adenoma stem cells on Wnt produced by adenoma Paneth cells. In the HEK293T human cancer cell line, expression of RNF43 blocks Wnt responses and targets surface-expressed frizzled receptors to lysosomes. In the RNF43-mutant colorectal cancer cell line HCT116, reconstitution of RNF43 expression removes its response to exogenous Wnt. We conclude that RNF43 and ZNRF3 reduce Wnt signals by selectively ubiquitinating frizzled receptors, thereby targeting these Wnt receptors for degradation.