We describe five patients with distinct posttraumatic subcutaneous nodules that usually evolved for several months before diagnosis. The nodules occurred in the subcutis of the elbow or hip of women, 33 to 74 years old, and in the hip of a 16-year-old boy. Histologically the fully developed lesions were totally or nearly totally encapsulated by thin, fibrous tissue. All contained well-preserved outlines of nonnucleated adipocytes; there was no inflammation or saponification. In one patient's lestion the viable subcutaneous tissue merged into several partially encapsulated necrotic nodules. In another case a smaller nodule was found within a larger, mostly calcified nodule. Names such as nodular-cystic fat necrosis, mobile encapsulated lipoma, and encapsulated necrosis have been offered to designate the lesion. Its pathogenesis seems to be related to trauma, rapid vascular insufficiency, and subsequent fibrous capsule formation. Many previously reported patients, however, had no history of trauma. The lesion must be distinguished histologically from lipoma, angiolipoma, alpha 1-antitrypsin deficiency-associated panniculitis, membranous fat necrosis, and pancreatic fat necrosis. Simple excision is the treatment of choice.