SummaryReactive oxygen species (ROS) production and inflammasome activation are the key components of the innate immune response to microbial infection and sterile insults. ROS are at the intersection of inflammation and immunity during cancer development. Balanced regulation of ROS production and inflammasome activation serves as the central hub of innate immunity, determining whether a cell will survive or undergo cell death. However, the mechanisms underlying this balanced regulation remain unclear. Mitochondria and NADPH oxidases are the two major sources of ROS production. Recently, NCF4, a component of the NADPH oxidase complex that primarily contributes to ROS generation in phagocytes, was reported to balance ROS production and inflammasome activation in macrophages. The phosphorylation and puncta distribution of NCF4 shifts from the membrane‐bound NADPH complex to the perinuclear region, promoting ASC speck formation and inflammasome activation, which triggers downstream IL‐18‐IFN‐γ signaling to prevent the progression of colorectal cancer (CRC). Here, we review ROS signaling and inflammasome activation studies in colitis‐associated CRC and propose that NCF4 acts as a ROS sensor that balances ROS production and inflammasome activation. In addition, NCF4 is a susceptibility gene for Crohn's disease (CD) and CRC. We discuss the evidence demonstrating NCF4's crucial role in facilitating cell–cell contact between immune cells and intestinal cells, and mediating the paracrine effects of inflammatory cytokines and ROS. This coordination of the signaling network helps create a robust immune microenvironment that effectively prevents epithelial cell mutagenesis and tumorigenesis during the early stage of colitis‐associated CRC.