Abstract: Dermoid cyst, Epidermoid cyst and Teratoid cyst are congenital lesions which are histologically related and frequently found in ovaries and scrotal region. The rate of occurrence in craniofacial region is quite low. It is very rare to encounter a true dermoid cyst in postauricular region. A case of unusual presentation of peripheral dermoid cyst in postauricular region is reported here with discussion regarding clinicopathological features and types. Emphasis is on early diagnosis, evaluation and complete excision keeping in mind associated complications and carcinomatous transformation.