One of the most serious complications of ulcerative colitis is the development of colorectal cancer. Screening patients with ulcerative colitis by standard histological examination of random intestinal biopsy samples might be inefficient as a method of cancer surveillance. This Review focuses on the current understanding of the pathogenesis of ulcerative colitis-associated colorectal cancer and how this knowledge can be transferred into patient management to assist clinicians and pathologists in identifying patients with ulcerative colitis who have an increased risk of colorectal cancer. Inflammation-driven mechanisms of DNA damage, including the generation and effects of reactive oxygen species, microsatellite instability, telomere shortening and chromosomal instability, are reviewed, as are the molecular responses to genomic stress. We also discuss how these mechanisms can be translated into usable biomarkers. Although progress has been made in the understanding of inflammation-driven carcinogenesis, markers based on these findings possess insufficient sensitivity or specificity to be usable as reliable biomarkers for risk of colorectal cancer development in patients with ulcerative colitis. However, screening for mutations in p53 could be relevant in the surveillance of patients with ulcerative colitis. Several other new biomarkers, including senescence markers and α-methylacyl-CoA-racemase, might be future candidates for preneoplastic markers in ulcerative colitis.