The role of circulating factors in regulating colonic stem cells (CoSCs) and colonic epithelial homeostasis is unclear. Individuals with long-standing type 1 diabetes (T1D) frequently have intestinal symptoms, termed diabetic enteropathy (DE), though its etiology is unknown. Here, we report that T1D patients with DE exhibit abnormalities in their intestinal mucosa and CoSCs, which fail to generate in vitro mini-guts. Proteomic profiling of T1D+DE patient serum revealed altered levels of insulin-like growth factor 1 (IGF-I) and its binding protein 3 (IGFBP3). IGFBP3 prevented in vitro growth of patient-derived organoids via binding its receptor TMEM219, in an IGF-I-independent manner, and disrupted in vivo CoSC function in a preclinical DE model. Restoration of normoglycemia in patients with long-standing T1D via kidney-pancreas transplantation or in diabetic mice by treatment with an ecto-TMEM219 recombinant protein normalized circulating IGF-I/IGFBP3 levels and reestablished CoSC homeostasis. These findings demonstrate that peripheral IGF-I/IGFBP3 controls CoSCs and their dysfunction in DE.