Adipose differentiation is an uncommon stromal alteration in cystosarcoma phyllodes (CP). We have studied 14 lesions to define the structural variation and prognostic significance of these rare forms of CP. All patients were women between 17 and 71 years of age (mean 40 years; median 42 years). Most were first seen with a mass; three were pregnant. Grossly, the lesions were circumscribed with lobulated cut surfaces. Microscopically, the mesenchymal component showed adipose differentiation that ranged from mature fat to liposarcoma with well-differentiated, myxoid, or pleomorphic components. Six lesions were high-grade malignant CP with immature cellular mesenchyme, abundant mitoses, and areas of pleomorphic liposarcoma. Seven tumors were low-grade malignant CP with few mitoses, relatively low cellularity, and myxoliposarcoma. One tumor with slight periductal condensation and mature adipose tissue was a benign CP, which we named lipophyllodes tumor. Two patients had concurrent breast carcinoma, and two others subsequently had carcinoma. The follow-up was 8-90 months (mean 46 months; median 39 months). There was one recurrence among eight patients treated with simple excision and no recurrences in six treated with mastectomy. One woman died of metastatic breast carcinoma. All others are alive and free of disease. CP with adipose differentiation can be graded histologically on the basis of this component. Despite the high-grade histology in some instances, the patients had an excellent prognosis when the tumors were completely excised.