An epithelial cyst behind an intact tympanic membrane with no previous history of ear infections is an unusual but not infrequent finding in children. If it is recognized early and completely removed, a permanent cure is obtained. However, if it is unrecognized or poorly treated, there may be far-reaching complications. The conventional technique of creating a tympanomeatal flap to remove the congenital cholesteatoma is often unsatisfactory. This is because the cyst may be located in the anterior-superior quadrant and extend beneath the malleus. It therefore becomes impossible to accomplish a complete removal and still preserve auditory function. This leads to incomplete removal with recurrence and subsequent radical removal with loss of auditory function and alteration of normal anatomy. A technique is presented whereby the canal skin, malleus, and cholesteatoma are removed en bloc. Once outside the confines of the bony ear canal, the tympanic membrane is inverted and the epithelial cyst removed under direct vision. The eardrum-malleus-canal skin autograft is then replaced in anatomical position and the hearing reconstructed with a homograft notched incus. This technique has been utilized in nine cases over the past 10 years. Case reports demonstrate the anatomical and functional results.