One of the most important consequences of chronically active ulcerative colitis (UC) or Crohn's disease (CD) - the two major forms of inflammatory bowel disease (IBD) - is the development of colorectal cancer (CRC). An increased risk for the occurrence of CRC in up to 30% of affected patients after 35years of UC has been reported. Recent evidence from population based studies indicates a lower risk. Nevertheless the incidence is still significantly increased as compared to individuals without chronic colitis. Colitis-associated CRC (CAC) does not display the adenoma-carcinoma sequence which is typical for sporadic CRC and the pathophysiology appears to be different. Chronic inflammation and the increased turnover of epithelial cells contribute to the development of low- and high-grade dysplasia which may further transform into CAC. Reactive oxygen species (ROS) generated by the inflammatory infiltrate are thought to contribute to the generation of dysplastic lesions. In sporadic CRC the sequence of mutations that finally lead to malignancy involves early activation of Wnt/β-catenin pathway (in 90% of cases) including mutations in adenomatous polyposis coli (APC) tumor suppressor gene, its regulating kinase GSK3β and β-catenin itself. β-catenin mutations are rarer in CAC and mutations in APC occur rather late during the disease progression, whereas there are earlier mutations in p53 and K-ras. Recent data indicate that the intestinal microbiome and its interaction with a functionally impaired mucosal barrier may also play a role in CAC development. CACs frequently show aggressive growth and early metastases. The treatment of CAC in patients with colitis always includes proctocolectomy with ileoanal anastomosis as meta- or synchronic lesions are frequent.