Histological differentiation between desmoplastic trichoepithelioma and morphea-like basal-cell carcinoma may be exceedingly difficult. Because the criteria for this differentiation published to date have not proved satisfactory to us, we undertook a study with the aim of formulating repeatable and reliable criteria for distinguishing between these two conditions of wholly different biological potential. We believe that the 26 sets of criteria listed here will permit reliable differentiation of desmoplastic trichoepitheliomas from morphea-like basal-cell carcinomas, even in biopsy specimens taken by shave and punch techniques.