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Background: The cytokines TNF (TNFSF2) and IFN&ggr; are important mediators of inflammatory bowel diseases and contribute to enhanced intestinal epithelial permeability by stimulating apoptosis and/or disrupting tight junctions. Apoptosis and tight junctions are also important for epithelial tissue morphogenesis, but the effect of TNF and IFN&ggr; on the process of intestinal epithelial morphogenesis is unknown. Methods/Principal Findings: We have employed a three-dimensional cell culture system, reproducing in vivo-like multicellular organization of intestinal epithelial cells, to study the effect of TNF on intestinal epithelial morphogenesis and permeability. We show that human intestinal epithelial cells in three-dimensional culture assembled into luminal spheres consisting of a single layer of cells with structural, internal, and planar cell polarity. Exposure of preformed luminal spheres to TNF or IFN&ggr; enhanced paracellular permeability, but via distinctive mechanisms. Thus, while both TNF and IFN&ggr;, albeit in a distinguishable manner, induced the displacement of selected tight junction proteins, only TNF increased paracellular permeability via caspase-driven apoptosis and cell shedding. Infliximab and adalumimab inhibited these effects of TNF. Moreover, we demonstrate that TNF via its stimulatory effect on apoptosis fundamentally alters the process of intestinal epithelial morphogenesis, which contributes to the de novo generation of intestinal epithelial monolayers with increased permeability. Also IFN&ggr; contributes to the de novo formation of monolayers with increased permeability, but in a manner that does not involve apoptosis. Conclusions: Our study provides an optimized 3D model system for the integrated analysis of (real-time) intestinal epithelial paracellular permeability and morphogenesis, and reveals apoptosis as a pivotal mechanism underlying the enhanced permeability and altered morphogenesis in response to TNF, but not IFN&ggr;. [ABSTRACT FROM AUTHOR]