The term sebaceous cyst is  often a misnomer: true sebaceous cysts  are rare. What  medical students, surgeons  and even dermatologists  refer to as  a sebaceous cyst is more often than not a keratinous (epidermoid) cyst; the lining of the cyst is keratinous in  nature and the contents  are  cheesy, greasy, semi-solid and may have a foul or rancid odour.

  It is important to distinguish the three main types of skin cyst from each  other, because their genesis and natural history are different.  Epidermoid cysts commonly follow  damage to the pilosebaceous follicle or implantation of epidermis, but may also be a component of several genetically determined syndromes such as Gardner's  syndrome. Trichilemmal cysts and steatocystoma multiplex are both genetically determined structural aberrations of the pilosebaceous follicle,  inherited as  specific entities.