It was known that many destructive agents, such as radiation and chemicals that cause mutations also cause cancer.
Some cancers were found to be consistently linked with chromosomal abnormalities. For example, about 90% of people suffering from chronic myeloid leukemia posses a reciprocal translocation between chromosomes 9 and 22.
Some specific types of cancer seem to run in families. An example of this is retinoblastoma.

Despite these observations suggesting that cancer might have a significant cause, there were still several important problems with the theory:

If cancer can be inherited, every cell in the body should receive the cancer-causing gene, and the cancer should appear over the whole body.
Many cancers do not run in families at all, and those that do sometimes appear in families without prior history of cancer.

A Genetic Model

In 1971, a scientist named Alfred Knudson, proposed a model to explain the genetic basis of cancer. Knudson studied retinoblastoma, a cancer that mostly develops in one eye, but occasionally in both eyes. The results of his studies indicated that, when retinoblastoma affects both eyes, the onset is at an early age, and, if this is the case, the affected children often had relatives who also suffer from retinoblastoma.

Based on this, he proposed that retinoblastoma was the result of two separate genetic defects, both of which are necessary for the cancer to develop. The reasoning behind this is the following:

In cases where the cancer affects only one eye, a single cell in this eye undergoes two successive mutations. Since the chance of two specific mutations in one cell is rather small, retinoblastoma is quite rare and typically develops in only one eye.
In cases where the cancer affects both eyes, one of the two mutations required was inherited. This means that every cell contains this mutation. So, all that is needed to develop the cancer, is the occurrence of the second mutation. Since each eye contains millions of cells, the chance of that happening in both eyes, is not to be underestimated.

The Cancer Process

This model suggests that cancer is a process consisting out of multiple steps, requiring several mutations. If one or more of these mutations are inherited, fewer additional ones are required to develop cancer. This idea of multiple mutations seems to be correct for several cancers.

This genetic theory of cancer is supported by the finding of genes that cause cancer when mutated. At present, is as recognized that cancer is essentially a genetic disease, although few cancers are actually inherited. Most tumors arise in response to environmental mutagens, or through the accumulation of spontaneous somatic mutations during our lifetimes.