Many transcription factors are known to control transcription at several promoters, while others are only active at a few places. However, due to their importance in controlling cellular functions, aberrant transcription factor function and inappropriate gene regulation have been shown to play a causal role in a large number of diseases and developmental disorders. Inflammatory bowel disease (IBD) is characterized by a chronically inflamed mucosa caused by dysregulation of the intestinal immune homeostasis. The aetiology of IBD is thought to be a combination of genetic and environmental factors, including luminal bacteria. The Caudal-related homeobox transcription factor 2 (CDX2) is critical in early intestinal differentiation and has been implicated as a master regulator of the intestinal homeostasis and permeability in adults. When expressed, CDX2 modulates a diverse set of processes including cell proliferation, differentiation, cell adhesion, migration, and tumorigenesis. In addition to these critical cellular processes, there is increasing evidence for linking CDX2 to intestinal inflammation. The aim of the present paper was to review the current knowledge of CDX2 in regulation of the intestinal homeostasis and further to reveal its potential role in inflammation.