<h3>Background and Design:</h3> Patients with lupus erythematosus, rheumatoid arthritis, and other diseases in which circulating immune complexes occur can develop a papular eruption on the extremities. Terms including<i>ChurgStrauss granuloma, cutaneous extravascular necrotizing granuloma, rheumatoid papules, superficial ulcerating rheumatoid necrobiosis, and interstitial granulomatous dermatitis with arthritis</i>have been given to this entity. We evaluated the clinical and histopathologic features of six patients with systemic lupus erythematosus, two patients with rheumatoid arthritis, and one patient with an incompletely characterized collagen vascular disease who developed cutaneous papules. <h3>Results:</h3> The lesions were located largely on the extremities and were symmetrically distributed in most of the patients. They ranged from a few to many and from skin colored to erythematous, and they had smooth, ulcerated, or umbilicated surfaces. Histopathologic examination showed a spectrum of changes that, we believe, reflect the evolution of lesions, ie, leukocytoclastic vasculitis with dense neutrophilic infiltrates and degenerated collagen in early lesions; palisaded granulomas surrounding leukocytoclastic debris, fibrin, and altered collagen in fully developed lesions; and, as the process wanes, palisaded granulomas with dermal fibrosis and scant neutrophilic debris. Each stage of development elicits a different differential diagnosis, which can be resolved by the application of histopathologic criteria. <h3>Conclusion:</h3> The histopathologic findings are consonant with the evolution of an immune complexmediated disease. The diverse histopathologic, and sometimes clinical, appearances account for the variety of names given to this condition. We propose the name<i>palisaded neutrophilic and granulomatous dermatitis of immune complex disease</i>to reflect the histopathologic evolution and clinical aspects of this condition. (Arch Dermatol. 1994;130:1278-1283)