Patients with long-standing inflammatory bowel disease (IBD) are at a higher risk of developing colorectal cancer (CRC). This risk increases with the longer duration of colitis, greater extent of inflammation, a family history of CRC, severity of bowel inflammation, and a coexistent primary sclerosing cholangitis. The cornerstone for comprehending the development of CRC in IBD and hence early detection is based on the understanding of the molecular pathways of IBD itself. At a molecular level, the pathogenesis of CRC is related to understanding the inflammatory changes and involves multiple inter-related pathways including (i) genetic alterations (e.g. chromosomal and microsatellite instability and hypermethylation), (ii) mucosal inflammatory mediators (e.g. COX-2, interleukin-6, interleukin-23, tumor necrosis factor-α, nuclear factor-κB, and chemokines), (iii) changes in the expression of receptors on the epithelial cells, and (iv) oxidant stress, mucosal breakdown, and intestinal microbiota. The aim of this review is to provide an evidence-based approach for the role of chronic inflammatory mechanisms and the molecular basis of these mechanisms in the development of CRC. Therefore, understanding the molecular basis of CRC is an important step for the identification of new biomarkers that can help in the early detection of CRC in these patients.