Abstract Casestudy Phyllodes tumors (PT) are uncommon biphasic fibroepithelial neoplasms that account for <1% of all breast tumors. The distinction between benign and malignant PTs is made based on a number of histologic characteristics, including an infiltrative margin, stromal overgrowth, mitotic count, hypercellularity and atypia. 30% of cases show heterologous differentiation, which mostly occurs in stromal elements. This can result in a wide range of tumor histopathology including lipomatous areas. Results We present the case of a 46-year-old female with a 3.1 cm left breast palpated mass and no significant past medical history. Ultrasound guided needle biopsy revealed multiple foci of hypercellular spindle cells with marked atypia and mitoses (ki-67: 40–60%) surrounded by focal fat necrosis. Immunohistochemical staining was negative for CK 5/6, p63, CAM 5.2, SMA, desmin, AE1/3, CD163, nuclear beta-catenin and CD34. The patient subsequently underwent a wire localization excisional biopsy. Microscopic examination revealed a biphasic hypercellular lesion with both stromal and distorted glandular elements and extensive lipomatous differentiation. Although mostly well- circumscribed, some infiltration into the surrounding tissue was identified as well as nuclear atypia and an increased mitotic rate (10 mitoses/HPF). The diagnosis of malignant phyllodes tumor with lipomatous differentiation was made based on these findings. FISH was performed and was negative for MDM2, suggesting that the lipomatous component itself was not malignant (i.e. liposarcoma) Conclusion Malignant phyllodes tumors rarely show heterologous differentiation. A literature review revealed that most lipomatous differentiation was liposarcomatous with rare cases of pure lipomatous metaplasia. Although malignant phyllodes tumor have the highest rate of metastasis relative to their benign counterparts, complete excision has resulted in a mortality rate of approximately 12%. The clinical implications of lipomatous differentiation are currently unknown. However, in these cases ensuring the lack of malignant liposarcomatous tumor growth is imperative.