Oncogenic KRAS (KRAS*) contributes to many cancer hallmarks. In colorectal cancer (CRC), KRAS* suppresses anti–tumor immunity to promote tumor invasion and metastasis. Here, we uncovered that KRAS* transforms the phenotype of carcinoma-associated fibroblasts (CAFs) into lipid–laden CAFs, promoting angiogenesis and tumor progression. Mechanistically, KRAS* activates the transcription factor CP2 (TFCP2) which upregulates the expression of the pro–adipogenic factors BMP4 and WNT5B, triggering the transformation of CAFs into lipid–rich CAFs. These lipid-rich CAFs, in turn, produce vascular endothelial growth factor A (VEGFA) to spur angiogenesis. In KRAS*–driven CRC mouse models, genetic or pharmacological neutralization of TFCP2 reduced lipid-rich CAFs, lessened tumor angiogenesis, and improved overall survival. Correspondingly, in human CRC, lipid-rich CAF and TFCP2 signatures correlate with worse prognosis. This work unveils a new role for KRAS* in transforming CAFs, driving tumor angiogenesis and disease progression, providing an actionable therapeutic intervention for KRAS*–driven CRC.