Epidermoid inclusion cysts are not true neoplasms, but they are true cysts (they are lined by an epithelium). The lining is squamous epithelium. They are thought to occur as the embryo develops between 3 and 8 weeks, when surface ectoderm is drawn into the developing head or spine - perhaps because of a failure of separation of surface ectoderm. A closed pocket is created. The cyst slowly enlarges through accumulation of debris from the desquamation of the lining. These masses are usually very slowly growing, and often have an undulating and insinuating margin that may wrap around adjacent vessels and nerves. The most common location is in cerebellopontine angle cistern of the posterior fossa. The cyst wall is usually very thin (almost invisible on MR/CT) and only rarely shows calcification or enhancement. Since the cyst contents are non-vital debris, they may differ from CSF in attenuation (CT) and signal intensity (MR). Dermoid Inclusion cysts have hair follicles, sebaceous glands, apocrine and eccrine sweat glands, in addition to squamous epithelium. These more complex structures are purely ectodermal derivatives. On imaging studies, sebaceous lipid is often confused and mistaken for adipose tissue. True adipose tissue - e.g. subcutaneous fat, or a lipoma - does not occur in a true dermoid cyst. Myth of the Mesoderm - http://www.ncbi.nlm.nih.gov/entrez/query.fcgi?itool=pubmed_Abstract&db=pubmed&cmd=Display&dopt=pubmed_pubmed&from_uid=2494873