Endometriosis is a chronic disease that affects millions of reproductive-age women. Despite the destructive and invasive nature of endometrioses, most cases are perpetually benign or eventually regress; however, atypical endometriosis is a precursor lesion and can lead to certain types of ovarian cancer. Endometriosis induced inflammation and auto- and paracrine production of sex steroid hormones contribute to ovarian tumorigenesis. These changes provide microenvironment necessary to accumulate enough genetic alterations for endometriosis associated malignant transformation. It takes years for endometriosis to undergo the pathophysiological progression that begins with atypical epithelial proliferation (atypical endometriosis and metaplasia), and then is followed by the formation of well-defined borderline tumors, and finally culminates in fully malignant ovarian cancer. This study is a review of the natural history of endometriosis and the role of microenvironments that favor the accumulation of genetic alterations and endometriosis-associated ovarian cancer progression.