Background Cancer-associated depression is a multifaceted condition that arises from the interplay of biological, psychological, and social factors in individuals diagnosed with cancer. Understanding the background of this condition involves exploring how cancer and its treatments can precipitate depressive symptoms and the mechanisms behind this association. Objective To describe and synthesize information on the complicated interactions between chronic stress, inflammation, immunological responses, and cancer development. To review the existing evidence regarding mechanisms that may include neurotransmitter imbalances, structural brain changes, and genetic predispositions as key contributors to depression in cancer. Methods Literature searches on Cancer-associated Depression were conducted in electronic databases like APA PsycINFO, Medline, Google Scholar, Embase, PubMed, Scopus, and Web of Science to understand the potential relationship between stress-induced depression and cancer. Research on the neurochemical, anatomical, immunological, genetic, and psychological changes that support cancer-related depression was collected, together with study features and findings, and the impact of depression on cancer was extracted. Results The literature search revealed a compilation of quantitative and qualitative studies about depression in cancer patients. Findings suggested the possibility of a link between cancer-induced stress and depression. Increased levels of proinflammatory cytokines (like IL-6) and dysregulation of the neurotransmitters including serotonin had shown links to the onset of depression in cancer patients. Lastly, antidepressants along with psychological interventions were found to be effective in treating depression in cancer patients. Conclusions This Narrative review contributes insights into the need for integrating oncology and mental health services to address the psychosocial needs of cancer patients. Future research should focus on the bidirectional interactions between stress and cancer, aiming to improve cancer care by incorporating mental health support, ultimately enhancing patient outcomes and quality of life.