‘Millennials’ - those born around 1990 - are four times more likely to develop rectal tumours, which begin in the large intestine, compared to those born in about 1950.
They are also at twice the risk of colon tumours, which start growing lower down.
An alarming three in ten rectal cancer diagnoses are now in patients below the age of 55.
The study suggests people who reached adulthood early in the 21st century, are facing an epidemic - and suggests they may need screening from their early 20s.
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The outlook is so bad that experts say the situation compares with the late 1800s - more than a century ago.
Epidemiologist Dr Rebecca Siegel, of the American Cancer Society, Atlanta, said: “Trends in young people are a bellwether for the future disease burden.
“Our finding that colorectal (bowel) cancer risk for millennials has escalated back to the level of those born in the late 1800s is very sobering.
“Educational campaigns are needed to alert clinicians and the general public about this increase to help reduce delays in diagnosis, which are so prevalent in young people, but also to encourage healthier eating and more active lifestyles to try to reverse this trend.”
In addition, her research team suggests the age to initiate screening people at average risk may need to be reconsidered.
They point out in 2013 in the US, 10,400 new cases of colorectal cancer (CRC) were diagnosed in people in their 40s, with an additional 12,800 cases diagnosed in people in their early 50s.
Added Dr Siegel: “These numbers are similar to the total number of cervical cancers diagnosed, for which we recommend screening for the 95 million women aged 21 to 65 years.”
In the UK, screening for bowel cancer is available to those over the age of 60.
Until now, bowel cancer - called colorectal cancer as it starts in the colon or the rectum - has been mainly a disease of the elderly. In Britain, almost nine out of 10 people with the disease are over 60 years old.
Previous research has found snacking on chocolate, biscuits and cakes could increase the risk of the disease - as could drinking fizzy drinks.
A diet high in red or processed meats, like bacon and sausages, and low in fibre increases the risk, as is being overweight or obese or being inactive. A high alcohol intake and smoking has also been linked with the disease.
The study published in the Journal of the National Cancer Institute said the number of cases are rising in young and middle aged adults, including people in their early 50s, with rectal cancer rates increasing particularly fast.
Overall, bowel cancer has been declining in the US since the mid 1980s, with steeper drops in the most recent decade driven by screening.
Recently though, studies have reported increasing CRC incidence in adults under 50, for whom screening is not recommended for those at average risk.
But these did not examine incidence rates by five year age group or year of birth, so the scope of the increasing trend had not been fully assessed.
So Dr Siegel and colleagues used a computer programme known as “age-period-cohort modelling” to disentangle factors that influence all ages, such as changes in medical practice, from those that vary by generation, typically due to changes in behaviour.
They analysed 490,305 cases among patients aged 20 and older across the US who were diagnosed with invasive bowel cancer from 1974 through 2013.
The study found after decreasing since 1974, colon cancer incidence rates increased by 1% to 2% per year from the mid-1980s in adults aged 20 to 39. In those 40 to 54, rates rose by 0.5% to 1% per year from the mid-1990s.
Rectal cancer incidence rates have been increasing even longer and faster, rising about 3% per year from 1974 to 2013 among 20 to 29 year olds and from 1980 in those aged 30 to 39.
In 40 to 54 year olds, rectal cancer rates increased by 2% per year from the 1990s. In contrast, rectal cancer rates in adults age 55 and older have generally been declining for at least 40 years, well before widespread screening.
Opposing trends in young and older adults over two decades have closed a previously wide gap in disease risk for people in their early 50s, compared to those in their late 50s.
Both colon and rectal cancer incidence rates in 50 to 54 year olds were half those of 55 to 59 year olds in the early 1990s.
But in 2012 to 2013, they were just 12.4% lower for colon and were equal for rectal cancer.
The findings follow another US study published in 2014 that predicted bowel cancer cases in 20 to 34 year olds will rocket by up to 90 per cent by 2030.
Having a close relative who developed the disease below 50 years of age puts you at a greater lifetime risk of developing the condition
The three main symptoms are blood in the stools, changes in bowel habit such as to more frequent, looser stools and abdominal pain.