Patients with long-standing inflammatory bowel disease (IBD) have an increased risk of developing colorectal cancer (CRC). However, the underlying mechanisms are not entirely clear. A genetic basis for the increased risk of CRC in IBD patients is only a partial explanation. It is possible that high levels of inflammatory mediators that are produced in this setting may contribute to the development and progression of CRC. Growing evidence supports a role for various cytokines, released by epithelial and immune cells, in the pathogenesis of IBD-associated neoplasia. Two key genes in the inflammatory process, cyclooxygenase-2 (COX-2) and nuclear factor kappaB (NF-kappaB), provide a mechanistic link between inflammation and cancer while other factors such as, TNF-alpha and IL-6-induced signaling have been recently shown to promote tumor growth in experimental models of colitis-associated cancer. This article reviews the pathogenesis of IBD-related CRC and summarizes the molecular mechanisms underlying the development of intestinal neoplasia in the setting of chronic inflammation.