Competitive cell interactions play a crucial role in quality control during development and homeostasis. Here, we show that cancer cells use such interactions to actively eliminate wild-type intestine cells in enteroid monolayers and organoids. This apoptosis-dependent process boosts proliferation of intestinal cancer cells. The remaining wild-type population activates markers of primitive epithelia and transits to a fetal-like state. Prevention of this cell-state transition avoids elimination of wild-type cells and, importantly, limits the proliferation of cancer cells. Jun N-terminal kinase (JNK) signaling is activated in competing cells and is required for cell-state change and elimination of wild-type cells. Thus, cell competition drives growth of cancer cells by active out-competition of wild-type cells through forced cell death and cell-state change in a JNK-dependent manner.