Epithelial sheath neuroma is a recently described condition with distinctive clinical and histopathologic features. The lesion is acquired, coin-sized, slightly erythematous, solitary, and situated on the back in elderly patients. Clinically, epithelial sheath neuroma usually is misdiagnosed as a flat basal cell carcinoma. Of the four examples collected to date by Requena et al.1, none persisted at the local site after a biopsy specimen was obtained. Histopathologically, epithelial sheath neuroma is positioned in the upper part of the dermis and is characterized by an increased number of cutaneous nerves enveloped by a distinctive perineural mantle, or sheath, that is comprised of squamous epithelium of keratinocytic type (Fig. 2). Typically, the nerves are surrounded completely by the epithelial sheath, which occasionally assumes the shape of a heart (Fig. 1). Other consistent findings are perineural and periepithelial fibrosis, as well as adjacent patchy infiltrates of lymphocytes. An hypothesis for the formation of epithelial sheaths is squamous metaplasia of the perineurium induced by what may have been an infiltration of inflammatory cells within its immediate vicinity. Heart shape of the epithelial sheath surrounding a nerve in this epithelial sheath neuroma (S-100 and cytokeratin double-stain). Nerves within the upper part of the dermis are enveloped by an epithelial sheath in this stereotypical example of an epithelial sheath neuroma (H & E).