Carcinomatous change of commonly encountered, benign epidermoid cysts, is a very rare event. Two cases of squamous cell and one case of basal cell carcinoma arising in the cyst wall and invading adjacent dermis were diagnosed in three epidermoid cysts in a review of 386 cases. The frequency of carcinomatous change has been reported to be as much as 9%. In our series it was 0.77%