A rare germline duplication upstream of the bone morphogenetic protein antagonist GREM1 causes a Mendelian-dominant predisposition to colorectal cancer (CRC). The underlying disease mechanism is strong, ectopic GREM1 overexpression in the intestinal epithelium. Here, we confirm that a common GREM1 polymorphism, rs16969681, is also associated with CRC susceptibility, conferring ∼20% differential risk in the general population. We hypothesized the underlying cause to be moderate differences in GREM1 expression. We showed that rs16969681 lies in a region of active chromatin with allele- and tissue-specific enhancer activity. The CRC high-risk allele was associated with stronger gene expression, and higher Grem1 mRNA levels increased the intestinal tumor burden in ApcMin mice. The intestine-specific transcription factor CDX2 and Wnt effector TCF7L2 bound near rs16969681, with significantly higher affinity for the risk allele, and CDX2 overexpression in CDX2/GREM1-negative cells caused re-expression of GREM1. rs16969681 influences CRC risk through effects on Wnt-driven GREM1 expression in colorectal tumors.