In the setting of pronounced inflammation, changes in the epithelium may overlap with neoplasia, often rendering it impossible to establish a diagnosis with certainty in daily clinical practice. Here, we discuss the underlying molecular mechanisms driving tissue response during persistent inflammatory signaling along with the potential association with cancer in the gastrointestinal tract, pancreas, extrahepatic bile ducts, and liver. We highlight the histopathological challenges encountered in the diagnosis of chronic inflammation in routine practice and pinpoint tissue-based biomarkers that could complement morphology to differentiate reactive from dysplastic or cancerous lesions. We refer to the advantages and limitations of existing biomarkers employing immunohistochemistry and point to promising new markers, including the generation of novel antibodies targeting mutant proteins, miRNAs, and array assays. Advancements in experimental models, including mouse and 3D models, have improved our understanding of tissue response. The integration of digital pathology along with artificial intelligence may also complement routine visual inspections. Navigating through tissue responses in various chronic inflammatory contexts will help us develop novel and reliable biomarkers that will improve diagnostic decisions and ultimately patient treatment.