Cytoglobin (Cygb) is a member of the hemoglobin family and is thought to protect against cellular hypoxia and oxidative stress. These functions may be particularly important in inflammation-induced cancer, e.g., in patients with ulcerative colitis (UC). In this study, we investigated the development of inflammation and tumors in a murine model of inflammation-induced colorectal cancer using a combined treatment of azoxymethane and dextran sulfate sodium. A bioinformatics analysis of genome-wide expression data revealed increased colonic inflammation at the molecular level accompanied by enhanced macroscopic tumor development in Cygb-deficient mice. Moreover, the expression of the UC-associated gene neurexophilin and PC-esterase domain family member 4 (Nxpe4) depended on the presence of Cygb in the inflamed colonic mucosa. Compared to wild type mice, RT-qPCR confirmed a 14-fold (p = 0.0003) decrease in Nxpe4 expression in the inflamed colonic mucosa from Cygb-deficient mice. An analysis of Cygb protein expression suggested that Cygb is expressed in fibroblast-like cells surrounding the colonic crypts. Histological examinations of early induced lesions suggested that the effect of Cygb is primarily at the level of tumor promotion. In conclusion, in this model, Cygb primarily seemed to inhibit the development of established microadenomas.