A rare example of malignant transformation in an ancient schwannoma arising in the right side of the neck of a 51-year-old man without any clinical manifestations suggesting neurofibromatosis is described. The tumor, approximately 4 cm at its largest dimension, was well circumscribed and had a direct connection with the sympathetic nerve. Microscopically, the central portion of the tumor showed features of ancient schwannoma characterized by extensive hyalinization with cystic degeneration, scattered spindle cells with hyperchromatic and tapered nuclei, and some symplastic changes. However, predominantly in the outer portion, a proliferation of spindle-shaped cells with enlarged nuclei was present. The nuclei of these cells showed irregular contours, coarse granular chromatin texture, and conspicuous nucleoli. Mitotic figures and small necrotic foci with scattered apoptotic bodies were also seen. Immunohistochemically, S-100 protein was almost negative in areas consisting of overtly atypical cells where the mitotic index evaluated with MIB-1 antibody was 30.5%. In contrast, S-100-positive bland spindle cells were scattered in an extensively hyalinized area with a labeling index less than 3%. P53 protein was strongly positive in atypical spindle cells. Although it is a very uncommon event, definite nuclear atypia, frequent mitotic figures, and the existence of small necrotic foci should be recognized as indicating a diagnosis of malignant degeneration of benign schwannoma. Immunohistochemistry would be useful as an ancillary technique in such a setting.