The intestinal epithelium constitutes an indispensable single-layered barrier to protect the body from invading pathogens, antigens or toxins. At the same time, beneficial nutrients and water have to be absorbed by the epithelium. To prevent development of intestinal inflammation or tumour formation, intestinal homeostasis has to be tightly controlled and therefore a strict balance between cell death and proliferation has to be maintained. The proinflammatory cytokine tumour necrosis factor alpha (TNFα) was shown to play a striking role for the regulation of this balance in the gut. Depending on the cellular conditions, on the one hand TNFα is able to mediate cell survival by activating NFκB signalling. On the other hand, TNFα might trigger cell death, in particular caspase-dependent apoptosis but also caspase-independent programmed necrosis. By regulating these cell death and survival mechanisms, TNFα exerts a variety of beneficial functions in the intestine. However, TNFα signalling is also supposed to play a critical role for the pathogenesis of inflammatory bowel disease (IBD), infectious diseases, intestinal wound healing and tumour formation. Here we review the literature about the physiological and pathophysiological role of TNFα signalling for the maintenance of intestinal homeostasis and the benefits and difficulties of anti-TNFα treatment during IBD.