Colitis-associated colorectal cancer (CAC) is defined as a specific cluster of colorectal cancers that develop as a result of prolonged colitis in patients with inflammatory bowel disease (IBD). Patients with IBD, including ulcerative colitis and Crohn’s disease, are known to have an increased risk of developing CAC. Although the incidence of CAC has significantly decreased over the past few decades, individuals with CAC have increased mortality compared to individuals with sporadic colorectal cancer, and the incidence of CAC increases with duration. Chronic inflammation is generally recognized as a major contributor to the pathogenesis of CAC. CAC has been shown to progress from colitis to dysplasia and finally to carcinoma. Accumulating evidence suggests that multiple immune-mediated pathways, DNA damage pathways, and pathogens are involved in the pathogenesis of CAC. Over the past decade, there has been an increasing effort to develop clinical approaches that could help improve outcomes for CAC patients. Colonoscopic surveillance plays an important role in reducing the risk of advanced and interval cancers. It is generally recommended that CAC patients undergo endoscopic removal or colectomy. This review summarizes the current understanding of CAC, particularly its epidemiology, mechanisms, and management. It focuses on the mechanisms that contribute to the development of CAC, covering advances in genomics, immunology, and the microbiome; presents evidence for management strategies, including endoscopy and colectomy; and discusses new strategies to interfere with the process and development of CAC. These scientific findings will pave the way for the management of CAC in the near future.