Patients with inflammatory bowel disease (IBD), both ulcerative colitis (UC) and Crohn's disease (CD), are at an increased risk for developing colorectal carcinoma (CRC). The accurate diagnosis of dysplasia in biopsies taken during periodic surveillance of long-standing IBD patients is most important in prevention of UC and CD related cancer. Distinction of low from high grade IBD-related dysplasia and differential diagnosis between IBD-related dysplasia and dysplasia in sporadic adenoma as well as distinction from pseudodysplastic lesions in inflammatory pseudopolyps or reparative lesions is often very subtle and difficult and demands expertise of second experienced gastrointestinal pathologist. Although surveillance colonoscopy with multiple biopsies does not reduce the cancer mortality, it offers a reasonable chance of detecting precancer and performed prophylactic colectomy. Novel methods of detecting dysplasia are continuously being evaluated, including chromoscopy and molecular biology markers. In the future, one may expect, from these new markers to detect the dysplasia in IBD patients before development of histological evidence of neoplastic changes.