Penile soft tissue tumors comprise 5% of tumors at this site and most have been reported as isolated case reports. The purpose of this review is to aid the practicing surgical pathologist in distinguishing penile soft tissue tumors, such as sarcomatoid squamous cell carcinoma, from other prognostically and therapeutically important entities in the differential diagnosis. Clinical presentation, management, prognosis and factors influencing behavior are reviewed. The immunohistochemical profiles and salient morphologic clues that may help distinguish penile spindle cell tumors from sarcomatoid carcinomas are evaluated. Soft tissue tumors of the penis may be classified as benign or malignant, as superficial or deep and in terms of age at presentation. All are rare. The most common benign soft tissue tumors that affect the penis are vascular neoplasms, followed by tumors of neural, myoid and fibrous origin. Among reported cases, the most frequent malignant penile soft tissue tumors are Kaposi sarcoma and leiomyosarcoma. Correctly diagnosing penile soft tissue tumors is imperative, because the biologic behavior and the clinical management of these neoplasms vary considerably. Distinguishing sarcomas from sarcomatoid carcinoma and melanoma is particularly important. Accurate diagnosis is best facilitated by consideration of all available aspects of the case, including clinical information, histopathologic findings and immunohistochemical results.