A distinctive form of basal cell carcinoma with follicular differentiation was studied in 15 biopsy specimens. The neoplasms differ from other variants of basal cell carcinoma by being situated on the face only, being small and well circumscribed, and having signs of follicular differentiation, namely, numerous tiny infundibular cyst-like structures and aggregations of neoplastic cells that resemble hair follicles in telogen. The diagnostic features of basal cell carcinomas with follicular differentiation are enumerated and illustrated.