Liposarcoma is a common soft tissue sarcoma and represents a group of neoplasms, each with distinct clinical behavior and pathologic findings. Proper classification is critical for clinical management and prognostication. Until recently, immunohistochemistry played a limited role in diagnosis of these tumors. Increased understanding of the underlying genetic basis of disease has paved the way for development of improved tools for diagnosis and new forms of targeted therapy. This article summarizes the clinical, pathologic, and molecular findings of the main liposarcoma subtypes. Special attention to the differential diagnosis and difficulties the pathologist may face when interpreting these lesions is discussed.