Colorectal carcinoma is a leading cause of cancer related death worldwide. This deadly disease advances through a series of clinical and histopathological stages, initiated by single crypt lesions to small benign tumors and finally to malignancy. Although some progress has been made in elucidating the formation of colorectal tumors at molecular/genetic levels, the possible mechanisms of dietary lipids in inducing and promoting colorectal tumorigenesis are poorly understood. Recent epidemiological studies, however, indicate that lipid-rich diet containing omega-6 fatty acids (i.e. linoleic acid, arachidonic acid, etc.) may somehow be related with the disease process. Rapid metabolism of arachidonic acid, increased activities of phospholipases (i.e. phospholipase-A2s), and the elevated levels of cyclooxygenase (COX) and lipoxygenase (LOX) in colonic cells were reported in various stages of the malignancy, suggesting a possible link between dietary lipids and the incidence of colorectal cancer. The major focus of this review is to delineate the recent findings on enhanced arachidonic acid metabolism and its conversion into eicosanoids during the initiation and progression of colorectal carcinogenesis. In addition, the identification and participation of various phospholipases are also discussed. It is speculated that many of these phospholipases can be used as targets for developing new drugs against colorectal as well as other adenocarcinomas.