Tumorigenesis is a multistep process, with oncogenic mutations in a normal cell conferring clonal advantage as the initial event. However, despite pervasive somatic mutations and clonal expansion in normal tissues, their transformation into cancer remains a rare event, indicating the presence of additional driver events for progression to an irreversible, highly heterogeneous, and invasive lesion. Recently, researchers are emphasizing the mechanisms of environmental tumor risk factors and epigenetic alterations that are profoundly influencing early clonal expansion and malignant evolution, independently of inducing mutations. Additionally, clonal evolution in tumorigenesis reflects a multifaceted interplay between cell-intrinsic identities and various cell-extrinsic factors that exert selective pressures to either restrain uncontrolled proliferation or allow specific clones to progress into tumors. However, the mechanisms by which driver events induce both intrinsic cellular competency and remodel environmental stress to facilitate malignant transformation are not fully understood. In this review, we summarize the genetic, epigenetic, and external driver events, and their effects on the co-evolution of the transformed cells and their ecosystem during tumor initiation and early malignant evolution. A deeper understanding of the earliest molecular events holds promise for translational applications, predicting individuals at high-risk of tumor and developing strategies to intercept malignant transformation.