Cells in healthy tissues acquire mutations with surprising frequency. Many of these mutations are associated with abnormal cellular behaviours such as differentiation defects and hyperproliferation, yet fail to produce macroscopically detectable phenotypes. It is currently unclear how the tissue remains phenotypically normal, despite the presence of these mutant cells. Here we use intravital imaging to track the fate of mouse skin epithelium burdened with varying numbers of activated Wnt/β-catenin stem cells. We show that all resulting growths that deform the skin tissue architecture regress, irrespective of their size. Wild-type cells are required for the active elimination of mutant cells from the tissue, while utilizing both endogenous and ectopic cellular behaviours to dismantle the aberrant structures. After regression, the remaining structures are either completely eliminated or converted into functional skin appendages in a niche-dependent manner. Furthermore, tissue aberrancies generated from oncogenic Hras, and even mutation-independent deformations to the tissue, can also be corrected, indicating that this tolerance phenomenon reflects a conserved principle in the skin. This study reveals an unanticipated plasticity of the adult skin epithelium when faced with mutational and non-mutational insult, and elucidates the dynamic cellular behaviours used for its return to a homeostatic state.