The Adenomatous Polyposis Coli (APC) gene is mutated in the majority of colorectal cancers (CRCs). Loss of APC leads to constitutively active WNT signaling, hyperproliferation, and tumorigenesis. Identification of pathways that facilitate tumorigenesis after APC loss is important for therapeutic development. Here, we show that RAC1 is a critical mediator of tumorigenesis after APC loss. We find that RAC1 is required for expansion of the LGR5 intestinal stem cell (ISC) signature, progenitor hyperproliferation, and transformation. Mechanistically, RAC1-driven ROS and NF-κB signaling mediate these processes. Together, these data highlight that ROS production and NF-κB activation triggered by RAC1 are critical events in CRC initiation.