Cell death and proliferation are at a glance dichotomic events, but occasionally coupled. Caspases, traditionally known to execute apoptosis, play non-apoptotic roles, but their exact mechanism remains elusive. Here, using intestinal stem cells (ISCs), we discovered that activation of caspases induces massive cell proliferation rather than cell death. We elucidate that a positive feedback circuit exists between caspases and JNK, which can simultaneously drive cell proliferation and cell death. In ISCs, signalling from JNK to caspases is defective, which skews the balance towards proliferation. Mechanistically, two-tiered regulation of the DIAP1 inhibitor , through its transcription and its protein localization, exists. This work provides a conceptual framework that explains how caspases perform apoptotic and non-apoptotic functions in vivo and how ISCs accomplish their resistance to cell death.