Many tumors recapitulate the developmental and differentiation program of their tissue of origin, a basis for tumor cell heterogeneity. Although stem-cell-like tumor cells are well studied, the roles of tumor cells undergoing differentiation remain to be elucidated. We employ Drosophila genetics to demonstrate that the differentiation program of intestinal stem cells is crucial for enabling intestinal tumors to invade and induce non-tumor-autonomous phenotypes. The differentiation program that generates absorptive cells is aberrantly recapitulated in the intestinal tumors generated by activation of the Yap1 ortholog Yorkie. Inhibiting it allows stem-cell-like tumor cells to grow but suppresses invasiveness and reshapes various phenotypes associated with cachexia-like wasting by altering the expression of tumor-derived factors. Our study provides insight into how a native differentiation program determines a tumor's capacity to induce advanced cancer phenotypes and suggests that manipulating the differentiation programs co-opted in tumors might alleviate complications of cancer, including cachexia.