An unusual adnexal tumor on the scalp of a 59-year-old woman with hereditary trichoepithelioma is reported. After the initial removal, the tumor recurred twice during a 4-year period. Mohs micrographic surgery resulted in full excision of the lesion. Two years later there was no evidence of recurrence. Histologic examination of the tumor showed it to merge with adjacent areas of classic trichoepithelioma. The tumor showed cytologic atypia, mitotic figures, necrosis, deep infiltration, and features of pilar differentiation including clear cells, reminiscent of cells of the follicular outer root sheath, and focal shadow-cell formation. The differential diagnosis of this malignant follicular neoplasm included pilomatrix carcinoma and basal-cell carcinoma with matrical differentiation. The unique clinicopathologic features, however, raised consideration of a "malignant trichoepithelioma."