Epidermal inclusion cysts are very common lesions that very rarely undergo malignant transformation-in the English-language literature we have only found 18 adequately documented cases. We present the case of a man with a 2-month history of a retroauricular skin lesion in which histological study revealed squamous cell carcinoma arising on an epidermal inclusion cyst. Cysts that grow rapidly, reach a large size, ulcerate, develop a fistula, or that do not respond to medical treatment, and those that recur should be excised completely and histological study performed of the whole lesion.