Lesions occurring on the skin and mucous membranes of domestic animals often present both diagnostic challenges and diagnostic confusion. One of the most common causes of confusion is inflammatory lesions that can be mistaken for neoplasia and vice versa. This confusion may emanate from intrinsic biologic variability, histopathologic interpretation, secondary alterations subsequent to inflammation or necrosis, or sampling errors and omission of pertinent information by the clinician. Some diagnostic problems associated with diagnoses of granulomatous inflammation, mesenchymal neoplasia, mast cell tumors, and squamous cell carcinomas are presented, and selected specific differential diagnoses associated with diagnostic problems are discussed.