Background. The coexistence of a well-differentiated liposarcoma (atypical lipomatous tumor) and benign smooth muscle component in a single soft tissue neoplasm is extremely rare. Case report. Histologic and immunohistochemical characteristics of tumor, which represented the reccurence of a retroperitoneal atypical lipoma in a 50-year-old female patient are presented in this paper. The tumor represented the recurrence of a retroperitoneal atypical lipoma. Lipomatous component consisted of a mixture of lipoma-like and sclerosing variant of well-differentiated liposarcoma. Characteristically, the heterologous smooth muscle differentiation was manifested as a macroscopically visible nodular growth in the form of a leiomyoma within the adipocytic component. It consisted of intersecting fascicles of spindle cells, which lacked mitoses and significant atypia, and were immunopositive for smooth muscle markers. Conclusion. This case of well-differentiated liposarcoma with benign smooth muscle is the first reported tumor of retroperitoneal localization. It is also the first one to exhibit the heterologous smooth muscle component as a distinct leiomyoma.