Inflammatory bowel disease (IBD) is an important etiologic factor in the development of colorectal cancer (CRC). The risk of CRC begins to increase 8 or 10 years after the diagnosis of IBD. This type of cancer is called colitis-associated CRC (CA-CRC). The molecular pathogenesis of inflammatory epithelium might play a critical role in the development of CA-CRC. Genetic alterations detected in CA-CRC such as genetic mutations, microsatellite instability, and DNA hypermethylation are also recognized in sporadic CRC; however, there are differences in the timing and frequency of molecular events between CA-CRC and sporadic CRC. Interaction between gene-environmental factors, including inflammation, lifestyle, psychological stress, and prior appendectomy, might be associated with the etiopathology of IBD. The mucosal inflammatory mediators, such as oxidant stress, free radicals, and chemokines, may cause the genetic alterations. Understanding the molecular mechanisms of CA-CRC might be important to develop clinical efficacies for patients with IBD. This review discusses the molecular characteristics of CA-CRC, especially ulcerative colitis-associated CRC, including clinical features, signaling pathways, and interactions between genetic alterations and environment involved in inflammatory carcinogenesis.