Molecular mechanisms specific to colitis-associated cancers have been poorly characterized. Using comparative whole-genome expression profiling, we observed differential expression of epiregulin (EREG) in mouse models of colitis-associated, but not sporadic, colorectal cancer. Similarly, EREG expression was significantly upregulated in cohorts of patients with colitis-associated cancer. Furthermore, tumor-associated fibroblasts were identified as a major source of EREG in colitis-associated neoplasms. Functional studies showed that Ereg-deficient mice, although more prone to colitis, were strongly protected from colitis-associated tumors. Serial endoscopic studies revealed that EREG promoted tumor growth rather than initiation. Additionally, we demonstrated that fibroblast-derived EREG requires ERK activation to induce proliferation of intestinal epithelial cells (IEC) and tumor development in vivo. To demonstrate the functional relevance of EREG-producing tumor-associated fibroblasts, we developed a novel system for adoptive transfer of these cells via mini-endoscopic local injection. It was found that transfer of EREG-producing, but not Ereg-deficient, fibroblasts from tumors significantly augmented growth of colitis-associated neoplasms in vivo. In conclusion, our data indicate that EREG and tumor-associated fibroblasts play a crucial role in controlling tumor growth in colitis-associated neoplasms.