Intraepithelial lymphocytes (IELs), including αβ and γδ T cells (T-IELs), constantly survey and play a critical role in maintaining the gastrointestinal epithelium. We show that cytotoxic molecules important for defense against cancer were highly expressed by T-IELs in the small intestine. In contrast, abundance of colonic T-IELs was dependent on the microbiome and displayed higher expression of TCF-1/ TCF7 and a reduced effector and cytotoxic profile, including low expression of granzymes. Targeted deletion of TCF-1 in γδ T-IELs induced a distinct effector profile and reduced colon tumor formation in mice. In addition, TCF-1 expression was significantly reduced in γδ T-IELs present in human colorectal cancers (CRCs) compared with normal healthy colon, which strongly correlated with an enhanced γδ T-IEL effector phenotype and improved patient survival. Our work identifies TCF-1 as a colon-specific T-IEL transcriptional regulator that could inform new immunotherapy strategies to treat CRC.