Patients with a localized primary liposarcoma of the extremity who were treated in Memorial Sloan-Kettering Cancer Center between 1968 and 1978 were studied. The prognosis of patients with extremity liposarcoma was analyzed according to histopathologic subtypes. A system of five subtypes was used; well-differentiated, myxoid, fibroblastic, lipoblastic, and pleomorphic liposarcomas. The 5-year treatment failure rates and survival rates were, respectively, 30% and 100% for well-differentiated, 25% and 88% for myxoid, 60% and 58% for fibroblastic, 100% and 40% for lipoblastic, and 64% and 56% for pleomorphic liposarcomas. Although local recurrence was present in all five subtypes, a significant increment in local failure was seen in patients with high-grade liposarcomas. Distant metastasis after the initial operation was not found in patients with well-differentiated liposarcoma and rare in the patients with myxoid liposarcoma. In contrast, 50% of the patients with fibroblastic, lipoblastic, and pleomorphic liposarcoma had a distant relapse within 5 years.