Mutations in mismatch repair (MMR) genes result in microsatellite instability (MSI) and early onset of colorectal cancer. To get mechanistic insights into the time scale, sequence and frequency of intestinal stem cell (ISC) transformation, we quantified MSI and growth characteristics of organoids of Msh2-deficient and control mice from birth until tumor formation and related them to tissue gene expression. Although in Msh2-deficient organoids MSI continuously increased from birth, growth characteristics remained stable at first. Months before tumor onset, normal Msh2-deficient tissue contained tumor precursor cells forming organoids with higher MSI, cystic growth and growth rates resembling temporarily those of tumor organoids. Consistently, Msh2-deficient tissue exhibited a tumor-like gene signature. Normal Msh2-deficient organoids showed increased inheritable transient cyst-like growth, which became independent of R-spondin. ISC transformation proceeded faster in vitro than in vivo independent of the underlying genotype but more under MMR deficiency. Transient cyst-like growth but not MSI was suppressed by aspirin. In summary, as highlighted by organoids, molecular alterations continuously proceeded long before tumor onset in MMR-deficient intestine, thus increasing its susceptibility for ISC transformation.