Chronic inflammation often precedes or accompanies a substantial number of cancers. Indeed, anti-inflammatory therapies have shown efficacy in cancer prevention and treatment. The exact mechanisms that turn a wound healing process into a cancer precursor are topics of intense research. A pathogenic link has been identified between inflammatory mediators, inflammation related gene polymorphisms and carcinogenesis. Animal models of cancer have been instrumental in demonstrating the diversity of mechanisms through which every tumor compartment and tumor stage may be affected by the underlying inflammatory process. In this review, we focus on the interaction between chronic inflammation, tumor stem cells and the tumor microenvironment. We summarize the proposed mechanisms that lead to the recruitment of bone marrow derived cells and explore the genetic and epigenetic alterations that may occur in inflammation associated cancers.