The presence of abundant inflammation is uncommon in well-differentiated liposarcomas (WDLPS). We describe ten cases of WDLPS in which an extensive lymphoplasmacytic infiltrate was present to such a degree that the differential diagnoses included inflammatory pseudotumor and Castleman's disease, and in which the lipogenic component could easily be overlooked. The median age (62 years) and tumor location (six retroperitoneal, three head/neck, one paratesticular) was comparable to usual WDLPS, as was the fact that six of ten cases recurred locally, but none metastasized during the period of follow-up (range 13 to 228 months, median 72 months). Key histologic features included (1) nodular lymphoplasmacytic aggregates; (2) intervening paucicellular stroma containing fibroblastic elements, frequently with plasma cell-rich zones and scattered atypical, often multinucleate cells; (3) merging of atypical adipocytic and inflammatory elements; and (4) adjacent clearly defined zones of lipoma-like or, more rarely, sclerosing-type liposarcoma. In recurrences, two cases "reverted" to purely lipoma-like liposarcoma, and two cases dedifferentiated. Immunoperoxidase studies demonstrated that B cells predominated in the lymphoid aggregates, and that the abundant plasma cells were polytypic in nature. We support the use of the term well-differentiated inflammatory liposarcoma for tumors of this type, which should be distinguished from high-grade liposarcoma containing inflammatory cells, and in order to identify a subgroup of WDLPS at high risk for misdiagnosis.