Lichen sclerosus is considered to be the precursor lesion of vulvar squamous cell carcinoma, of which only 2-5% progress to squamous cell carcinoma. Differentiated vulvar intraepithelial neoplasia (VIN) has been proposed to be the direct precursor lesion, but this is a recently recognized, and a difficult to diagnose, entity, which may easily be mistaken for a benign dermatosis. The aim of this study was to test the hypothesis that of all lesions that have been diagnosed as lichen sclerosus in the past, a part might currently be diagnosed as differentiated VIN, and to identify histopathological differences between lichen sclerosus lesions with and without progression to vulvar squamous cell carcinoma. All lichen sclerosus slides were revised by two expert gynecopathologists and histopathological characteristics were documented. After revision of lichen sclerosus biopsies without progression (n = 61), 58 were reclassified as lichen sclerosus. Revision of lichen sclerosus biopsies with progression yielded concordant diagnoses in 18 of 60 cases (30%). Of 60 lesions, 25 (42%) were reclassified as differentiated VIN. The median time from differentiated VIN to vulvar squamous cell carcinoma was shorter (28 months) than that from lichen sclerosus to vulvar squamous cell carcinoma (84 months) (P < 0.001). Lichen sclerosus that progressed to squamous cell carcinoma, but did not meet the criteria for differentiated VIN, more often showed parakeratosis (P = 0.004), dyskeratosis (P < 0.001), hyperplasia (P = 0.048) and basal cellular atypia (P = 0.009) compared with lichen sclerosus without progression. In conclusion, differentiated VIN diagnosis has been frequently missed and is associated with rapid progression to squamous cell carcinoma. Patients with lichen sclerosus with dyskeratosis and parakeratosis, hyperplasia and/or basal cellular atypia should be kept under close surveillance as these lesions also tend to progress to squamous cell carcinoma.