Inflammatory breast cancer (IBC) is a rare and very aggressive subtype of breast cancer with clinical manifestations similar to acute inflammation. The prognosis of IBC is still poor even though combination therapy with surgery, chemotherapy, and target therapy, mainly due to a lack of fully understanding of the cellular and molecular mechanisms of IBC pathogenesis and progression. In the present article, we have comprehensively reviewed the connection of the pathogenesis of IBC and inflammation, immune reaction and cancer, particularly focused on the role and mechanism of tumor microenvironment related to IBC formation, tumor cell proliferation, migration, invasion and metastasis as well as the clinical manifestations of IBC. As the diverse cells including inflammatory cells, immune cells, and tumor cells and the soluble molecules produced by these cells in the microenvironment play an essential role in IBC development and progression. Therefore, anti-inflammatory therapy and immunotherapy with available agents warrant further investigation in the treatment of IBC.