The Triggering Receptors Expressed on Myeloid cells (TREM) gene cluster contains receptors that regulate a variety of leukocytes. TREM1 synergizes with Toll Like Receptors to promote cytokine production in neutrophils, macrophages and dendritic cells (DC). Paradoxically, although TREM1 and TREM2 both signal via DAP12, TREM2 is a negative regulator of inflammation in macrophages and DC. TREM2 is expressed in the colon but its role in colitis and colitis-associated cancer (CAC) is poorly understood. We found TREM2 expressed in monocytic myeloid-derived suppressor cells (MDSC) and tumor-associated macrophages (TAM). Moreover, TAM expressed a apparent TREM2 ligand. To test the role of TREM2 in inflammation-induced cancer we studied the azoxymethane (AOM)-dextran sulfate sodium (DSS)-induced model of CAC. DSS administration led a pronounced influx of myeloid cells and upregulation of both TREM1 and TREM2. Surprisingly, we found that Trem2-/- mice had less severe colitis as indicated by reduced histological scores, colon shortening and inflammatory cytokine production in the colon. AOM-DSS carcinogenesis in Trem2-/- mice resulted in slightly reduced total polyp counts and mitotic epithelial cells but a substantial reduction in the numbers of advanced carcinomas compared to wild type mice. Taken together, our data suggest an important role for TREM2 in the regulation of colitis and CAC likely via control of epithelial proliferation during colonic injury and inflammation.