A case of squamous cell carcinoma (SCC) arising in a lesion of Hailey-Hailey disease at the penoscrotal junction is reported. The patient was treated with arsphenamine (Salvarsan 606) early in the disease. It is possible that this carcinogen, as well as friction and the local irritation of long-standing Hailey-Hailey skin lesions, may be the predisposing factors for the development of SCC in this case.