Chronic inflammation is a well-known risk factor in development of intestinal tumorigenesis, although the exact mechanisms underlying development of colitis-associated cancer (CAC) still remain obscure. The activity and function of immunoproteasome has been extensively analyzed in the context of inflammation and infectious diseases. Here, we show that the proteasomal immunosubunit LMP7 plays an essential role in development of CAC. Mice devoid of LMP7 were resistant to chronic inflammation and formation of neoplasia, and developed virtually no tumors after AOM/DSS treatment. Our data reveal that LMP7 deficiency resulted in reduced expression of pro-tumorigenic chemokines CXCL1, CXCL2 and CXCL3 as well as adhesion molecule VCAM-1. As a consequence, an impaired recruitment and activity of tumor-infiltrating leukocytes resulting in decreased secretion of cytokines IL-6 and TNF-α was observed. Further, the deletion or pharmacological inhibition of LMP7 and consequent blockade of NF-κB abrogated the production of IL-17A, which possesses a strong carcinogenic activity in the gut. Moreover, in vivo administration of the selective LMP7 inhibitor ONX-0914 led to a marked reduction of tumor numbers in wild-type (WT) mice. Collectively, we identified the immunoproteasome as a crucial mediator of inflammation-driven neoplasia highlighting a novel potential therapeutic approach to limit colonic tumorigenesis.