Intestinal stem cells (ISCs) are highly vulnerable to damage, being in a constant state of proliferation. Reserve stem cells repair the intestinal epithelium following damage-induced ablation of ISCs. Here, we report that the epigenetic regulator plant homology domain (PHD) finger protein 16 (PHF16) restores homeostasis of the intestinal epithelium after initial damage-induced repair. In Phf16−/Y mice, revival stem cells (revSCs) showed defects in exiting the regenerative state, and intestinal crypt regeneration failed even though revSCs were still induced in response to tissue damage, as observed by single-cell RNA sequencing (scRNA-seq). Analysis of Phf16−/Y intestinal organoids by RNA sequencing (RNA-seq) and ATAC sequencing identified that PHF16 restores homeostasis of the intestinal epithelium by inducing retinoic acid receptor (RAR)/retinoic X receptor (RXR) target genes through HBO1-mediated histone H3K14 acetylation, while at the same time counteracting YAP/TAZ activity by ubiquitination of CDC73. Together, our findings demonstrate the importance of timely suppression of regenerative activity by PHF16 for the restoration of gut homeostasis after acute tissue injury.