Cancer relapse after chemotherapy remains a main cause of cancer-related death. Although the relapse is thought to result from the propagation of resident cancer stem cells (CSCs)1, a lack of experimental platforms that enable prospective analysis of CSC dynamics with sufficient spatiotemporal resolution has hindered testing of this hypothesis. Here, we develop a live genetic lineage-tracing system that allows longitudinal tracking of individual cells in xenotransplanted human colorectal cancer organoids and identify LGR5+ CSCs that display a dormant behavior in a chemo-naive state. Dormant LGR5+ cells are marked by p27 expression, and intravital imaging directly demonstrates the persistence of LGR5+p27+ cells during chemotherapy, followed by clonal expansion. Transcriptome analysis reveals an upregulation of COL17A1, a cell adhesion molecule that strengthens hemidesmosome, in dormant LGR5+p27+ cells. COL17A1-knockout organoids lose the dormant LGR5+p27+ subpopulation and become sensitive to chemotherapy, suggesting a role of cell-matrix interface in dormancy maintenance. Chemotherapy disrupts COL17A1 and breaks the dormancy in LGR5+p27+ cells through FAK-YAP activation. Abrogation of YAP signaling restrains chemo-resistant cells from exiting dormancy and delays tumor regrowth, highlighting the therapeutic potential of YAP inhibition in preventing cancer relapse. These results offer a viable therapeutic approach to overcome refractoriness of human colorectal cancer to conventional chemotherapy.