A dermal cyst is a teratoma of a cystic nature that contains an array of developmentally mature, solid tissues. It frequently consists of skin, hair follicles, and sweat glands, while other commonly found components include clumps of long hair, pockets of sebum, blood, fat, bone, nails, teeth, eyes, cartilage, and thyroid tissue.
As dermoid cysts grow slowly and contain mature tissue, this type of cystic teratoma is nearly always benign. In those rare cases wherein the dermoid cyst is malignant, a squamous cell carcinoma usually develops in adults, while infants and children usually present with an endodermal sinus tumor.