Abstract In the gastrointestinal tract, Wnt and BMP signals control Lgr5 ⁺ stem cell activity during homeostasis, whereas injury elicits an Lgr5 -independent, fetal-like regenerative program driven by YAP. Helicobacter pylori ( H. pylori ) infection activates YAP, but whether fetal-like reprogramming contributes to gastric pathology, and what drives it, has remained unclear. Here we show that H. pylori -induced gland hyperplasia is accompanied by YAP-dependent fetal-like transcriptional response and loss of epithelial BMP signaling. Epithelial BMP inhibition alone is sufficient to induce this program in vivo, through an epithelial–immune–stromal cascade: BMP-deficient epithelial cells secrete chemokines that recruit IL-1β-producing immune cells, and IL-1β drives enrichment of pro-regenerative fibroblasts producing prostaglandin E2. In gastric epithelial–stromal assembloids, IL-1β elicits stromal prostaglandin E2 production and subsequent epithelial YAP activation. Stromal deletion of the IL-1 receptor abrogates H. pylori -driven reprogramming and pathology. These data define a cascade that converts BMP loss into a fetal-like regenerative state and shapes H. pylori -associated gastric disease.