The human CD34 surface antigen is expressed on hematopoietic stem / progenitor cells. In the skin, vascular endothelial cells and mesenchymal cells including dermal dendritic cells and perifollicular cells are stained with the anti-CD34 monoclonal antibody. Interestingly, other than those mesenchymal cells in the dermis, the outer-root sheath enithelia of the lower hair follicle, which corresponded to the site of the stem cells of the hair follicle, are also positively immunostained. We examined the CD34 immunohistochemical localization in the various stage of the sebaceous nevus. In the sebaceous nevus with development of secondary tumors, ectopic CD34+ epithelial cells within the epidermis or at the base of infundibula-like structure were present with scant CD34+ mesenchymal microenvironment.