p120-Catenin (p120) functions as a tumor suppressor in intestinal cancer, but the mechanism is unclear. Here, using conditional p120 knockout in Apc-sensitized mouse models of intestinal cancer, we have identified p120 as an “obligatory” haploinsufficient tumor suppressor. Whereas monoallelic loss of p120 was associated with a significant increase in tumor multiplicity, loss of both alleles was never observed in tumors from these mice. Moreover, forced ablation of the second allele did not further enhance tumorigenesis, but instead induced synthetic lethality in combination with Apc loss of heterozygosity. In tumor-derived organoid cultures, elimination of both p120 alleles resulted in caspase-3–dependent apoptosis that was blocked by inhibition of Rho kinase (ROCK). With ROCK inhibition, however, p120-ablated organoids exhibited a branching phenotype and a substantial increase in cell proliferation. Access to data from Sleeping Beauty mutagenesis screens afforded an opportunity to directly assess the tumorigenic impact of p120 haploinsufficiency relative to other candidate drivers. Remarkably, p120 ranked third among the 919 drivers identified. Cofactors α-catenin and epithelial cadherin (E-cadherin) were also among the highest scoring candidates, indicating a mechanism at the level of the intact complex that may play an important role at very early stages of of intestinal tumorigenesis while simultaneously restricting outright loss via synthetic lethality.