Serious intestinal side-effects that target the NOTCH-HES1 pathway in human cancer differentiation therapy make it necessary to understand the pathway at the human organ level. Herein, we endogenously introduced HES1−/− mutations into human embryonic stem cells (hESCs) and differentiated them into human intestinal organoids (HIO). The HES1−/− hESCs retained ES cell properties and showed gene expression patterns similar to those of wild-type hESCs when they differentiated into definitive endoderm and hindgut. During the formation of the HES1−/− lumen we noted an impaired development of mesenchymal cells in addition to the increased differentiation of secretory epithelium. RNA-Seq revealed that inhibited development of the mesenchymal cells may have been due to a downregulation of WNT5A signaling. Overexpression of HES1 and silencing of WNT5A in the intestinal fibroblast cell line CCD-18Co indicated that HES1 was involved in the activation of WNT5A-induced fibroblast growth and migration, suggesting the likelihood of the Notch pathway in epithelial-mesenchymal crosstalk. Our results facilitated the identification of more precise underlying molecular mechanisms displaying distinct roles in HES1 signaling in stromal and epithelial development in human intestinal mucosa.