Patients with long-standing ulcerative colitis and Crohn's disease have an increased risk of developing colorectal cancer and patients with small intestinal Crohn's disease are at increased risk of small bowel adenocarcinoma. Colorectal cancer appearing on the ground of inflammatory bowel disease is the result of a process which is believed to begin from no dysplasia progressing to indefinite dysplasia, low-grade dysplasia, high-grade dysplasia and finally to invasive adenocarcinoma, although colorectal cancer can arise without proceeding through each of these steps. Ulcerative colitis patients with total proctocolectomy and ileal pouch anal-anastomosis have a rather low risk of dysplasia in the ileal pouch, although the anal transition zone should be monitored periodically, especially if chronic pouchitis is present with associated severe villous atrophy. Concerning the risk factors predisposing to colorectal cancer in the setting of ulcerative colitis or Crohn's disease, it seems that the risk increases with longer duration and greater anatomic extent of colitis, the degree of inflammation, and the presence of primary sclerosing cholangitis and family history of colorectal cancer. Concerning the mechanisms of carcinogenesis, it is now well established that the molecular alterations responsible for sporadic colorectal cancer, namely chromosomal instability, microsatellite instability and hypermethylation, also play a role in colitis-associated colon carcinogenesis. Chemoprevention strategies include the administration of agents such as aminosalicylates, ursodeoxycholic acid, and possibly folic acid and statins, the exact role of which remains to be further elucitated.