Sheep are an important livestock species whose gastrointestinal tract is essential for overall health. Feed contaminants such as bacterial toxins and mycotoxins severely damage the sheep intestine, yet the mechanisms remain mostly elusive partially due to the lack of physiologically relevant in vitro models. Here, we investigated molecular mechanisms underlying deoxynivalenol (DON)-induced toxicity by developing intestinal organoids from isolated intestinal crypts of Hu sheep. The organoids had a central lumen and monolayer epithelium, and could be continuously passaged, cryopreserved, and resuscitated. Histological and transcriptomic analysis showed that the intestinal organoids recapitulate the cell lineages and gene expression characteristics of the original intestinal tissues. Statistical analysis indicated that DON exposure significantly inhibited organoid formation efficiency, as well as the proliferation and activity of intestinal organoid cells. RNA-seq and Western blotting analysis further revealed that DON exposure induces intestinal toxicity by inhibiting the PI3K/AKT/GSK3β/β-catenin signaling pathway. Our study provides a novel example of organoid application in toxicity studies and reveals the signaling pathway involved in DON-induced toxicity in sheep, which is of great significance for improving mitigation strategies for DON.