Sebaceous differentiation is commonly seen in cutaneous neoplasms, both in the context of lesions showing predominantly sebaceous differentiation (e.g., sebaceous adenoma, sebaceoma and sebaceous carcinoma), or as more focal sebaceous components in neoplasms with other primary lines of differentiation. Sebaceous changes can also be a component of benign cystic lesions or epidermal tumours, and sebaceous hyperplasia is commonly encountered. This review is intended to provide an overview of the cutaneous lesions with sebaceous differentiation, with a particular emphasis on facilitating histological diagnosis of neoplasms. In addition, the role of immunohistochemical studies is outlined, as well as the evaluation of potential cases of Muir-Torre syndrome.