Intestinal epithelium regeneration and homeostasis must be tightly regulated. Alteration of epithelial homeostasis is a major contributing factor to diseases such as colorectal cancer and inflammatory bowel diseases. Many pathways involved in epithelial regeneration have been identified, but more regulators remain undiscovered. Metabolism has emerged as an overlooked regulator of intestinal epithelium homeostasis. Using the model organism Drosophila melanogaster, we found that ether lipids metabolism is required to maintain intestinal epithelial homeostasis. Its dysregulation in intestinal progenitors causes the activation of the unfolded protein response of the endoplasmic reticulum (UPR) that triggers Xbp1 and upregulates the conserved disulfide isomerase PDIA3/ERp60. Activation of the Xbp1-ERp60 signaling causes Jak/Stat-mediated increase in progenitor cells, compromising epithelial barrier function and survival in males but not females. This study identified ether lipids-PDIA3/ERp60 as a key regulator of intestinal progenitor homeostasis in health that, if altered, causes pathological conditions in the intestinal epithelium.